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Articles Published in: 2011

August 26, 2011

FHA Borrowers Beware: Fraudsters Targeting Homeowners In Trouble

By Joe Wallace

FHA and conventional borrowers in California and elsewhere have been targeted by alleged scam artists claiming to help borrowers avoid foreclosure by adding their names to lawsuits (for a fee) against financial institutions. According to an August 19, 2011 L.A. Times article by E. Scott Reckard, the California Attorney General is pursuing actions against a group of Southern California lawyers and their associates for such activities. The action stems from situations where homeowners were allegedly tricked into paying up to $10 thousand each to be included as plaintiffs in lawsuits. According to legal paperwork filed in Los Angeles County Superior Court, “Consumers are led to believe that joining these lawsuits will stay foreclosures, reduce their loan balances, entitle them to monetary benefits and potentially get them their homes free and | more...

 

August 25, 2011

FHA Loans: What Does It Mean To Be Listed in CAIVRS?

By Joe Wallace

Any type of home loan includes a credit check, including FHA insured mortgages. But FHA loans include an extra requirement when it comes to credit–the borrower is not eligible for an FHA mortgage if he or she is delinquent on any type of federal debt. An FHA approved lender is required to check to insure the borrower is not delinquent on any debt owed to the government; that check is done using a system called CAIVRS, which stands for Credit Alert Interactive Voice Response System. This system provides a list of all people currently in default on an FHA insured mortgage, those who have had a government-backed home loan foreclosed on in the last 36 months, and those who are delinquent on a debt owed to the government. According to | more...

 

August 24, 2011

FHA Condo Loans and Conversion Projects

By Joe Wallace

FHA loans aren’t just for typical suburban homes–borrowers can apply for an FHA insured mortgage on many different types of properties, including condominium projects. It would be easy to assume that FHA loans are only for existing condo projects since FHA guidelines state all condo loans may be issued only on FHA-approved condos. But FHA loans may also be issued for condo conversion projects if they are approved and meet FHA requirements. One of the first hurdles for a condo conversion project to clear in order to be considered for an FHA insured condo loan is the definition of “conversion”. According to FHA rules, “Conversion to a condominium regime occurs in those projects which involve

 

August 24, 2011

New FHA Loan Limits: How Do They Affect HECM Loans?

By Joe Wallace

Recently the FHA issued a press release announcing new FHA limits which take effect October 1, 2011. On that day, single family loan limits in high-cost counties would be lowered, but the majority of the country would see no change to FHA loan limits, according to the FHA official site. The new loan limits were originally implemented in 2008 as part of the Housing and Economic Recovery Act, but those limits were delayed under the Economic Stimulus Act of 2008. Under the new FHA loan limits, “The current standard (floor) loan limit for areas where housing costs are relatively low will remain unchanged at $271,050 for one-unit properties.

 

August 23, 2011

FHA Loan Modifications: When Does a Trial Payment Plan Fail?

By Joe Wallace

In a recent blog post we discussed FHA loan foreclosure avoidance options, and what happens when a lender agrees to work with the borrower to do a trial loan modification. In some circumstances a borrower is required to complete a trial payment plan successfully before a more long-term loan modification program can begin. According to the FHA, “A trial payment plan is an important tool for confirming a mortgagor

 

August 22, 2011

FHA Announces New Loan Limits Effective October 1, 2011

By Joe Wallace

The FHA has issued a press release detailing changes to the FHA loan limits. The new limits will be lower in high-cost counties unless Congress introduces legislation to change the loan limits. According to a Friday, August 19, 2011 press release, “On October 1, 2011, the Federal Housing Administration (FHA) will implement new single-family loan limits as specified by the Housing and Economic Recovery Act of 2008 (HERA).

 

August 18, 2011

FHA Loans and Foreclosure Avoidance: The Trial Payment Plan

By Joe Wallace

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

By Joe Wallace

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

By Joe Wallace

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