Have you heard? FHA is planning to Increase Mortgage Insurance Premiums in 2013. Currently the FHA’s loan losses are high and therefore their capital reserves are below the Congressionally mandated minimums. In an effort to avoid the need for a taxpayer bailout, FHA has announced some changes to FHA financing that start in 2013. They are also trying to eliminate the current provision that removes Mortgage Insurance when the loan balance reaches 78% of the home’s original value. Also, the allowable 6% seller contribution will be reduced in 2013.

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