Since the housing crash we have witnessed more and more rule and regulation changes that affect the way loans are written. Making changes and adjustments to current rules, and writing new rules, has not slowed and I don’t see them slowing down anytime soon. The new changes that will go into effect in 2015 will not affect your current FHA loan unless you refinance.

Just a few days ago the Federal Housing Administration (FHA) announced two more additional changes that will affect FHA loans. One of the rule changes will prevent borrowers from having to pay post-settlement interest (PDF). The Consumer Financial Protection Bureau (CFPB) defined the post-settlement interest as the “prepayment penalty”. This specific rule applies to any FHA loan that closes on or after January 21st 2015.

The other rule that will go into effect, and will affect loans who are originated on or after January 10th 2015, is on how soon a borrower with an FHA-insured adjustable-rate mortgages (ARMs) has to be notified that their rate will increase. Currently a borrower only had to be given 25 days’ notice of a rate increase. With the new ruling the borrower has to be given at a minimum of 60 days’ notice but no more than 120 days’ notice. This new ruling is called “Notification requirement and lock-back period” (PDF)

For any additional information concerning your FHA loan please consult your mortgage advisor. For question about buying and selling real estate please contact the Settles Team.