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Articles Published in: March 2011

March 23, 2011

FTC Warns Borrowers of Mortgage Scams

By Joe Wallace

In an age of uncertainty in both the job and the housing markets, there are plenty of scams targeting homeowners fearful of losing their homes to FHA loan default and foreclosure. Anyone worried about defaulting on an FHA mortgage can be more vulnerable to a scam targeted to prey specifically on such fears; the FHA, HUD and the Federal Trade Commission issue regular warnings about mortgage scams. The best defense against companies and individuals who claim to offer relief, bailout programs or counseling–but don’t deliver–is knowing how such scams work. The FTC warns that con artists use a variety of tactics to find new victims. Some advertise on radio, television and websites; others conduct searches of public records to find names and addresses to send more personalized messages. Regardless of | more...

 

March 22, 2011

FHA Loan Facts on Title I Loans for Manufactured Homes

By Joe Wallace

FHA home loans aren’t just available for traditional suburban houses; the FHA also insures loans for manufactured housing. Just as with FHA loans for traditional homes, the FHA insures or guarantees the loan rather than providing the loan itself. The FHA guaranty makes qualified borrowers more attractive to lenders willing to issue the loan. FHA Title I loans for manufactured homes can be used in one of three ways–to purchase the home itself, to purchase a lot for a home already owned or to be purchased, and the Title I loan can also be used to buy a manufactured home and lot in combination. The FHA has different loan terms depending on the nature of the Title I loan. Maximum loan amounts for the home only are just under $70 | more...

 

March 21, 2011

FHA Updates Recommendations For Homes With Problem Drywall

By Joe Wallace

The FHA has issued a press release that addresses fixing “problem drywall” in homes including those purchased or intended to be purchased with FHA mortgage loans. In May 2010, the U.S. Consumer Product Safety Commission press release, “CPSC Identifies Manufacturers of Problem Drywall Made in China” identified a group of manufacturers, “whose drywall emitted high levels of hydrogen sulfide in testing conducted for the agency by Lawrence Berkeley National Laboratory (LBNL). There is a strong association between hydrogen sulfide and metal corrosion” according to the press release. That corrosion had the potential to damage the electrical system in homes built with drywall made by the manufacturers named in the release. Could the value of, or the quality of life in, those homes be affected by the problem drywall? The FHA | more...

 

March 21, 2011

FHA Loan Assumption

By Joe Wallace

The FHA allows its home loans to be assumed, which is when a borrower takes over the responsibility for paying an existing FHA mortgage taken out by another borrower. According to the FHA,

 

March 16, 2011

FHA 203(k) Rehab Mortgages

By Joe Wallace

It’s true that those dedicated to purchasing and improving a fixer-upper home face a challenging road when it comes to getting the money to do the job properly. A loan applicant trying to get a conventional loan may face requirements that the improvements be done and paid for before the money for those repairs will be issued–not an ideal situation for those trying to balance budgets, pay the mortgage on time and improve their property. An FHA loan could be the answer. The 203(k) loan program provides qualified borrowers with an FHA insured loan to those using the property to be improved as the primary residence. (It’s not for investment properties or rental units.) As with other FHA mortgage loans, there is a 3.5% minimum down payment. But 203(k) mortgages | more...

 

March 15, 2011

FHA Loans and Housing Counseling

By Bruce Reichstein

First time home buyers and experienced house hunters alike can learn a lot from FHA-approved housing counseling agencies. For newcomers, learning the ins and outs of FHA mortgages can help a borrower prepare, budget and save money for the loan process while getting an education on how to avoid predatory lending and real estate scams. For experienced buyers, housing counseling is still a good idea–especially if it’s been many years since the original home purchase. Many things about the FHA loan process have changed over the years and an update on old information can be extremely helpful. The federal government believes in FHA-approved and HUD-approved housing counseling. So much so that in late 2010 the Obama administration approved more than $70 million in housing counseling grants for 500 organizations across | more...

 

March 14, 2011

FHA Appraisals and Required Inspections

By Joe Wallace

In our last blog post we discussed FHA appraisals and when an automatic inspection is not required in cases such as wells or possible termite problems. A change in the rules in 2005 dropped the requirement for automatic inspections for termites except as required from the local or state authority. Well water issues were similarly changed except where governed by state or local law or the presence of qualifying factors such as nearby industry or agriculture. But in some cases automatic inspections are required no matter what. Any condition that could be a danger to the FHA loan applicant once they move in must be reported and an inspection of the property must be conducted if the buyer wants to move ahead with the sale. According to FHA requirements, “…the | more...