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· FHA is implementing risk-based pricing today

· Omnibus housing bill could move more quickly because of turmoil surrounding Fannie Mae and Freddie Mac

· Fed is expected to implement HOEPA changes today

· One likely change will change disclosure of broker compensation

· This change affects all loans originated by mortgage brokers

I. FHA Is Implementing Risk-based Pricing

Despite likely Congressional action to enact a moratorium, FHA is moving forward with the implementation of risk-based pricing today. Below is the message that FHA has posted on its fha.gov website for the handling of administrative problems with the implementation of risk-based pricing.

How to Handle Any Implementation Problems:

While FHA anticipates a smooth transition to risk-based premiums and has extensively tested the systems that will provide the upfront premium fact
ors, as well as the annual premiums, FHA also recognizes that some errors may occur. Therefore, FHA has established an e-mail inbox for industry representatives to submit questions and / or problems, be they associated with particular cases or more globally to a large number of loans lenders
are trying to insure. To notify FHA of any problems or request additional assistance, please contact FHA at: riskbased@hud.gov

III. Impact of Recent Events on the Housing Bill

As a result of actions taken by the Treasury and Fed this week-end in response to the unprecedented turmoil involving Fannie Mae and Freddie Mac last week, it is more likely the enactment of the housing bill will be expedited (possibly as soon as this week). Senator Chris Dodd, Chairman of the Senate Banking Committee, appeared on CNBC this morning saying that he hoped the House would move in the next 24-48 hours to pass the Senate bill or make modest changes to it.

IV. HOEPA Rule

The Fed is expected to announce new rules today that will tighten standards on subprime and alt-A mortgages (e.g. an ability to repay standard and a limitation on the use of stated income). One provision is expected to include changes to the disclosure requirements with respect to mortgage broker compensation.

In the proposed rule published earlier this year, brokers would be required to advise borrowers of their total compensation upfront and it could not increase prior to closing. The change to broker compensation requirements would affect all loans originated by mortgage brokers not just alt-A and subprime.

These new rules will not be effective immediately. We expect at least several months of lead time before they become effective.

V. IRS Bulletin 2008-28

IRS published IRB 2008-28. No actions were taken against seller funded down payment assistance organizations.