Wednesday, January 20, 2010

Good news and bad news from L.A. Times

Yes, I'm back to being a clipping service.  First, the good news from the front page of today's L.A. Times: home prices in the Southland rose 4% in December.  And, most experts agree that even though the economy is soft, the worst is over for area housing.  I agree, as long as interest rates stay low.

Now for the bad news: restrictions on FHA loans have tightened.  A seller can no longer pay up to 6% of a buyer's closing costs -- the amount has been reduced to 3%.  Buyers will now need to come up with more cash at closing.  Required FICO scores have risen (actually, that's a good thing) and the upfront mortgage premium has risen to 2.25% of the loan.  It was 1.75%.  That will reduce the affordability of many FHA loans.

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