August 19, 2011
FHA Trial Payment Plans: Part Two
In another blog post we discussed the FHA foreclosure avoidance trial payment plan, which FHA.gov describes as “an important tool for confirming a mortgagor
Articles Published in: August 2011
August 18, 2011
FHA Loans and Foreclosure Avoidance: The Trial Payment Plan
The FHA has released FHA Mortgagee Letter 2011-28, which outlines “circumstances under which mortgagors must successfully complete a trial payment plan prior to the mortgagee executing a loan modification or partial claim action under the Federal Housing Administration
August 17, 2011
FHA 203(k) Loan Questions and Answers
The FHA 203(k) Rehabilitation loan is defined by the FHA as a way to put the purchase and rehab costs of a property into a single loan. “Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home. The FHA 203(k) is often used to rehab properties, but it can also be used to help families affected by natural disasters in federally-declared disaster areas. The 203(k) comes in both new purchase and streamline refinance versions, and there are rules concerning borrower eligibility and acceptable property types. For example, the FHA requires rehab construction to comply with HUD minimum property standards plus all local codes. The | more...
August 17, 2011
HUD Offers New Help For Storm Victims in Alabama and Missouri
2011 has proven to be a stormy year for people all across America. It seems that every month, FHA and HUD press releases announce a new set of states receiving FHA/HUD assistance in the wake of storms, floods, and other natural disasters. Such assistance usually includes forbearance on FHA loans, a moratorium on foreclosures, and FHA loan assistance for repairing or rebuilding houses affected in federally declared disaster areas. But now there’s a new type of help–something the Department of Housing and Urban Development describes as “unprecedented” in a recent press release. HUD now offers “assistance to families affected by this spring
August 16, 2011
FHA Mortgage Insurance Premiums: Are They Tax Deductible?
Successful home ownership requires borrowers to become more financially savvy in several ways; one of those ways is finding any possible way to save money as a home owner. FHA borrowers often invest in energy-efficient upgrades, modern insulation, even solar heaters. Refinancing an FHA home loan to lower the interest rate is another way to save, and for some homeowners tax legislation could help improve the bottom line even more. Some borrowers are now eligible to deduct some of their FHA mortgage insurance premiums on federal income tax returns. According to the FHA official site, FHA loan applicants who closed their transactions between 2007 and 2010 may be eligible based certain conditions spelled out in IRS rules. The FHA official site states, “Legislation was recently passed to make FHA mortgage | more...
August 15, 2011
FHA Streamline Refinance Rules for “Net Tangible Benefits”
The FHA changed the rules on Streamline Refinancing Loans for all case numbers assigned on or after April 18, 2011. The new regulations now include a requirement that the lender must “determine that there is a Net Tangible Benefit (NTB) to the borrower as a result of the streamline refinance transaction”. Those tangible benefits include specific requirements based on the type of refinancing loan. For example, a fixed-rate loan that is refinanced to another fixed rate mortgage must have a five percent minimum reduction in the principal, interest and mortgage insurance payment, also described as PI & MIP. For FHA Streamline Loans which refinance fixed-rate mortgages to a One Year Adjustable Rate Mortgage, the requirements include a minimum two percent reduction in interest. Fixed rate FHA loans to Hybrid ARMs | more...
August 12, 2011
FHA Loans and Your Rights as a Borrower
Predatory lending and real estate scams are common no matter what the economy is doing; when markets are unpredictable and the economic picture isn’t as optimistic as usual, scam artists tend to come out of the woodwork. How can house hunters protect themselves from scams and schemes? Sometimes the first step is knowing some of the basics. When it comes to applying for an FHA home loan, borrowers have rights which should be understood long before the search for a new home begins. Knowing your rights is a way to protect yourself from a range of things from simple high-pressure tactics that aren’t in your best interest, to outright fraud. The FHA official site emphatically states, “ATTENTION BORROWER! This may be the largest and most important loan you get during | more...
August 11, 2011
FHA Housing Counseling
It’s easy to get overwhelmed by the details, facts and figures connected to buying a new home. If you’re new to the FHA home loan application process, there are plenty of unique requirements for FHA home loans not found in conventional mortgages–the protections offered to the buyer and lender alike require some additional learning as you go through the process for the first time. That’s why the FHA offers help to mortgage loan applicants in the form of HUD-sponsored housing counseling. There are a variety of agencies across the U.S. offering HUD-sponsored counseling services on buying a new home, credit issues related to applying for an FHA mortgage, even foreclosure avoidance and FHA reverse mortgage loan information. Some housing counseling services are free, while others come as low-cost packages. FHA | more...
August 10, 2011
FHA Loans and Credit Reports–Can The Borrower Contest Them?
When applying for an FHA insured home loan, borrowers often wonder what kind of data lenders require to determine if the borrower is a good credit risk. FHA rules are fairly straightforward on the subject; according to the FHA official site, “Credit reports submitted with each loan must contain all credit available in the accessed repositories. They also must provide an account of all credit, residence history, and public records information available in the credit repositories of each borrower responsible for the mortgage debt.” The bottom line is that if you have information on your credit report, the lender has access to it and will consider it when deciding about approving the FHA loan. But can the borrower dispute or contest that information? There are two basic types of credit | more...
August 10, 2011
“Special” Property Requirements For FHA Loans
Many of the most frequently asked questions about FHA home loans involve issues related to property requirements. Some borrowers are told by the lender or appraiser that a particular condition must be fixed before the loan can be approved. The borrower sometimes wishes to dispute such requirements, asking where in the FHA rules it specifically states that “condition X” must be addressed in order for the loan to proceed. But not every situation a borrower is likely to encounter is specifically addressed by a line in the FHA rulebook. What some don’t understand is that the FHA does not anticipate every housing issue with a rule addressing that condition. Instead, the FHA rules are designed to defer to local building codes, plus state or local laws where applicable. That’s not | more...