November 2, 2011
Allied Home Mortgage Corporation is no longer allowed to do business with the FHA or HUD, according to a November 1, 2011 press release from the Department of Housing and Urban Development. “The U.S. Department of Housing and Urban Development
November 1, 2011
FHA loans, like other mortgage transactions, are governed by a set of regulations including the Real Estate Settlement Procedures Act or RESPA. According to the official site at FHA.gov, “The Real Estate Settlement Procedures Act (RESPA) insures that consumers throughout the nation are provided with more helpful information about the cost of the mortgage settlement and protected from unnecessarily high settlement charges caused by certain abusive practices.” Borrowers who suspect those abusive practices have been used in their FHA home loan transactions (and/or conventional loans) are urged to report such problems. But where does the borrower start? What areas of the FHA loan transaction are governed by RESPA? According to the FHA, “RESPA is about closing costs and settlement procedures. RESPA requires that consumers receive disclosures at various times in | more...
November 1, 2011
There’s a page on the official site for the Department of Housing and Urban Development that describes an FHA loan applicant’s rights. “Attention Borrower,” the page begins, “This may be the largest and most important loan you get during your lifetime. You should be aware of certain rights before you enter into any loan agreement.” There’s a list of things a mortgage borrower has the right to expect from any home loan experience, including the right to shop around for the best loan and the right to be fully informed as to the total cost of your home loan. But what do these rights mean? Let’s examine a couple of them and define their terms. From the official site, “You have the RIGHT to shop for the best loan for | more...
October 31, 2011
The FHA 203(k) Rehab loan allows buyers and current home owners 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 203(k) can help raise the value of a property or simply make the home more comfortable for those who aren’t interested in selling. Many people think of the 203(k) only when considering large projects, but did you know there’s a smaller version of the 203(k) allowed by the FHA? According to the HUD official site, “For less extensive repairs/improvements” borrowers are encouraged to apply for a Streamlined 203(k). According to the rules of an FHA 203(K), the property must be at least one year old–the 203(k) isn’t meant for | more...
October 28, 2011
FHA loan applicants naturally want to know how much mortgage they are qualified to get–how much can an FHA borrower receive on an FHA insured home loan? The answer isn’t as simple as a fixed dollar amount. There are many things that factor in to the final FHA home loan amount and not all of them are connected to the sale price of the home. Your FHA loan amount is influenced by the current state of the housing market, the interest rate on the loan, the asking price on the property and the fair market value of the home. The first and most obvious factor that can affect an FHA home loan amount is the borrower’s qualifications. How much are you qualified to borrow based on your income and debt | more...
October 27, 2011
There are many frequently asked questions about FHA loans in connection with rental properties. Some borrowers purchase a home with an FHA insured mortgage and live there for a while, then decide to explore their options for renting the existing home out and purchasing a new one to live in. One of the most common questions in this case has to do with qualifying income for a new FHA loan. “Can I rent my current home and use the income to qualify for a new FHA mortgage?” According to the FHA official site, there was concern that borrowers might exaggerate the amount of rental income received on the first property. To address those concerns, the FHA instituted a new policy which took effect in late 2008. “Beginning with case number | more...
October 26, 2011
Transparency in the lending process and informed borrowing are two of the most important issues related to the “front end” of FHA loans. Before you commit to buy, even before you turn in an FHA home loan application, it’s crucial to know what your rights as a borrower are and how those rights affect every step of the FHA loan process. Did you know you’re entitled to an explanation as to why an FHA loan application was denied? According to the FHA official site, the Equal Credit Opportunity Act (ECOA) governs lender responsibilities in this area. “If your application is denied, ECOA requires your lender or mortgage broker to give you a statement of the specific reasons why it denied your application or tell you how you can obtain such | more...
October 26, 2011
A frequently asked question about FHA home loans concerns the length of time it takes to learn whether the loan application has been approved or not. This is a part of the FHA loan process that can be stressful for some borrowers, especially those who have never applied before and don’t know what to expect. The simple answer is that FHA requirements include a rule that the lender must take action on your application and let you know about that action no later than 30 days after the application has been completed and turned in. FHA rules emphasize the application must be complete for this rule to take effect. But what does that mean? Some borrowers mistakenly think submitting partial information on credit data, employment history or other information might | more...
October 25, 2011
One FHA loan frequently asked question relates to married FHA borrowers with non-purchasing or non-occupying spouses. When an FHA borrower applies for a loan and the spouse does not co-sign or co-borrower, are there situations where the spouse could be required to sign the loan? According to FHA loan rules, this issue depends greatly on state law. The FHA itself has no requirement for a non-borrowing spouse to sign, but states which require certain types of documentation for “valid and enforceable” loans could need a signature from the non-borrowing spouse. But what kind of signature? In these cases, the state law usually requires a signature to indicate the non-borrowing spouse’s status in connection with the loan. The non-borrower isn’t obligated by law to become financially responsible–just to state they are | more...
October 24, 2011
When an FHA borrower wants to refinance an FHA mortgage using FHA streamline refinancing, there are sometimes questions about adding or removing a borrower from the title. This may be needed for several reasons. If a borrower is getting a divorce, for example, refinancing the property under a single name would make sense. The same goes for a single borrower who is refinancing in connection with getting married–he or she might want to add the spouse to the title. When does the FHA allow the borrower to add or remove another person to the title during an FHA streamline loan? According to the FHA official site, adding a borrower is simple. “Individuals may be added to the title on a streamline refinance without a credit worthiness review, and triggering the | more...