Across the country, mortgage insurers have been increasing their requirements. They want to see better home mortgage loans that are less likely to default. And FHA loans are joining the fold.

Yesterday, the Federal Housing Administration announced that it would be raising its home mortgage loan insurance premiums to 1.75% from 1.50%. This is a change that is expected to bring more revenue in from FHA loans, especially since the number of loans insured by the FHA is on the rise.

The Wall Street Journal reports on some of the reasoning behind the decision to raise mortgage insurance premiums on FHA loans:

The FHA may well need more income to cope with the payouts it will have
to make to lenders and loan investors in coming years. At a time when
house prices generally are falling, the share of new mortgages insured
by the FHA has soared to 23% in July from a low of 1.8% in 2006,
according to Inside Mortgage Finance, a trade publication. Guy Cecala,
publisher of Inside Mortgage Finance, said the FHA’s share could reach
30% by year end.

One of the most important things in your personal finances when it comes to getting a home mortgage loan is your credit score and your credit report. You should check your credit information regularly, just to make sure that it is up to date, accurate and that you are on the right track.

If you are looking for a truly free credit report or score (without having to sign up for a paid service), here are some ways to do that:

* Annualcreditreport.com: This is the Web site set up by the three major credit bureaus in response to a law that requires them to each to give you one free credit report a year. No free credit score, though.

* Creditkarma.com: A Web site that offers to check your credit score at no charge to you. No credit report, though.

* Listclassaction.com: TransUnion recently settled a lawsuit, and the terms include the ability to view your credit report and credit score, both for free, from TransUnion.

Despite concerns over the economy, and the mortgage market (or maybe because of them) mortgage fraud is on the rise. Indeed, the Mortgage Asset Research Institute reports that mortgage fraud is up 42% from last year, with many loan applications overstating income (that then isn’t properly verified by mortgage lenders).

BloggingStocks offers two possible explanations for this mortgage fraud issue:

1. Tighter credit markets mean that desperate mortgage lenders are continuing their shoddy lending practices.

2. Mortgage lenders are actually reporting mortgage fraud as they should.

Of course, points out BloggingStocks, a combination of both is likely to be the answer.

It seems that in recent there has been very little agreement on what is "next" for the mortgage market crisis. However, one thing that many are agreeing on is that there will be, in fact, a "next" tier to the current problems. The only question is what the "next" will be.

One of the candidates for the "next" mortgage market crisis in the commercial mortgage market. Property values are declining for commercial real estate as well as for residential, and there were plenty of questionable loans made in the commercial mortgage area as well.

BloggingStocks looks at how the commercial mortgage market is following what we’ve already seen in residential:

Banks and borrowers over-extended themselves on the premise that prices
would keep rising and bail out imprudent lending decisions. This means
that the firewall that policymakers think separated one kind of credit
default from another went up in smoke.

I loved this. Happy Friday!

I loved this. Happy Friday!

Last month, IndyMac bank succumbed to the years of bad loans and other problems that had been plaguing the company. The FDIC took over the bank and began trying to figure out what to do about all the home mortgage loans IndyMac had that were likely to slip into foreclosure.

First of all, the FDIC halted all foreclosures to come up with a plan. Then, yesterday, a plan was revealed. The Wall Street Journal reports on the plan to help IndyMac borrowers:

The Federal Deposit Insurance Corp. said the modification would combine
interest-rate reductions, longer repayment periods and principal
forbearance on first mortgages either held or securitized by IndyMac.

One of the differences in the FDIC plan as opposed to other mortgage
lenders’ efforts is that the FDIC plans to roll this out widely, rather
than focusing on a loan by loan basis. We will be watching what happens with the IndyMac borrowers to see how this might work for others.

Sometimes it takes a couple of months for numbers to be reported in terms of housing market data. This is why it is no surprise that June numbers for housing starts are just starting to come in. And they are low — the lowest that they have been in 17 years. Building continues to move at a slow pace. CNN Money reports that housing starts are causing continued concern over the economy:

The sharp fall in building activity suggests that home building will
continue to be a drag on the economy in the second half of 2008.
Earlier this year, many economists hoped that building activity would
bottom out this summer and start to show signs of improvement.

I’ve even seen it (finally) in my local area. Housing starts in my new subdivision had been moving along quite steadily up through the last couple of months. Now things have suddenly dropped off. This could mean that some places that have been fairly insulated from the housing market problems are starting to see a decline in activity.

Sometimes it takes a couple of months for numbers to be reported in terms of housing market data. This is why it is no surprise that June numbers for housing starts are just starting to come in. And they are low — the lowest that they have been in 17 years. Building continues to move at a slow pace. CNN Money reports that housing starts are causing continued concern over the economy:

The sharp fall in building activity suggests that home building will
continue to be a drag on the economy in the second half of 2008.
Earlier this year, many economists hoped that building activity would
bottom out this summer and start to show signs of improvement.

I’ve even seen it (finally) in my local area. Housing starts in my new subdivision had been moving along quite steadily up through the last couple of months. Now things have suddenly dropped off. This could mean that some places that have been fairly insulated from the housing market problems are starting to see a decline in activity.