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Articles Published in: May 2012

May 31, 2012

FHA Loans and Student Loan Deferments

By Joe Wallace

A reader asks, “If applying for FHA and student loans are in deferment until after the closing date, does it have to show a year after the first payment is due? For example, if the payment is due July 1, 2012 does it have to show July 15, 2012 or later?” This question is addressed in the FHA loan rules spelled out in HUD 4155.1, Chapter 4 Section C. It’s covered in the section titled, “Borrower Liabilities: Projected Obligations and Obligations Not Considered Debt” and includes a list of things the FHA does not consider debt for the purposes of calculating a borrower’s debt-to-income ratio for an FHA home loan. Student loans are specifically addressed in this section, which states, “Debt payments such as a student loan or balloon note | more...

 

May 29, 2012

Up Front Mortgage Insurance Payments For FHA Home Loans

By Joe Wallace

A reader asks, “Can I roll my upfront MIP on to my loan above the county loan limits? The limit in San Diego is $697500, can I roll the upfront MIP on to the loan or do I have to pay cash?” Up front mortgage insurance payments, or UFMIP, have clearly defined rules as spelled out in HUD 4155.2. According to the rules, “The UFMIP remittance period begins on the date of loan settlement or the date of disbursement of the mortgage proceeds, whichever is later. UFMIP must be paid to FHA in a lump sum within 10 calendar days after the loan is closed.” That lump sum can be paid in cash or rolled into the loan amount, but the borrower cannot split the two options and pay a | more...

 

May 29, 2012

FHA Loan Reader Questions: Unsettled Credit Report Details

By Joe Wallace

A reader asks, “There are two old debts from 2003 that I have not been able to verify on my credit report. The total of this is $520, the underwriter on the mortgage has been relentless about this debt. I will not pay for something that do not know what it is for. Does this affect my FHA loan?” Reader questions like these come in quite often. Some of them seem to be asking whether the FHA has a rule that gets around a lender’s insistence on a specific issue connected with the FHA loan; a requirement such as a minimum waiting period following a bankruptcy proceeding or the example cited in the reader’s question here. Do FHA loan rules trump the financial institution’s policies in such cases? Can the | more...

 

May 28, 2012

Saying Thanks To Our Veterans on Memorial Day

By Joe Wallace

Memorial Day is traditionally a time to remember the sacrifices made by men and women in uniform. As Joseph Campbell once said, “A hero is someone who has given his or her life to something bigger than oneself.” But for many of us, Memorial Day remembrances always lead to thoughts of those currently serving–the sacrifices of today insure the freedoms of tomorrow. Our veterans, past and present, have sacrificed plenty, and it’s only fitting to pause and give thanks whether silently in private or in a public event. As we all know, Memorial Day is so much more than back yard barbecues, department store sales and a day off work. The reason we’re able to enjoy all these things is thanks in no small part to what our people in | more...

 

May 25, 2012

FHA Rules For Streamline Refinancing With or Without a Credit Check

By Joe Wallace

FHA Streamline Refinancing loans–which are issued for those with existing FHA mortgages–are available in two ways. One is a non-credit qualifying streamline loan which is available to qualified borrowers, the other is the “with credit check” or “credit qualifying” streamline refinance. When is a borrower eligible for a no-credit check FHA streamline loan? Part of the answer requires a look at the FHA definition of the streamline loan. According to the FHA official site, “Streamline refinances are designed to lower the monthly principal and interest payments on a current FHA-insured mortgage, and must involve no cash back to the borrower, except for minor adjustments at closing that are not to exceed $500.” The FHA permits streamline refinancing loans with no credit check with the borrower has owned the property for | more...

 

May 24, 2012

FHA Loans, Your Application, and Credit Reports

By Joe Wallace

When you apply for an FHA home loan, there are several pieces of required information you need to complete the application. One is your work and residence history, another is the nature of your income, and still another is your credit data–what lines of credit you currently have and how much you owe. When the lender receives your application, all this information is verified according to standard procedures as described in the rules for FHA home loans. The loan officer must request your credit report, in the form of something called the Three Repository Merged Credit Report or TRMCR. What many FHA loan applicants don’t know is what the lender is looking for from this report. According to HUD 4155.1, Mortgage Credit Analysis for Mortgage Insurance on One-to Four-Unit Mortgage | more...

 
FHA Home Loan Basics

May 23, 2012

More on FHA Loan Pre-Purchase Counseling

By Joe Wallace

Recently we reported on a study conducted by FHA/HUD that examined the effects of pre-purchase counseling for house hunters. According to a May press release, HUD No. 12-085, the Pre-Purchase Counseling Outcome Study, “enrolled 573 individuals seeking pre-purchase counseling services in fall 2009 from 15 HUD-funded counseling agencies across the country.” “The objectives of the study were to examine the characteristics of pre-purchase counseling clients, the types of services they received, and whether and under what circumstances they purchased housing in the 18 months after starting counseling.” The results of this study have been published by the FHA and HUD, and for those on the fence about whether or not to take advantage of such counseling services, the data is quite convincing. Potential FHA borrowers who find themselves in the | more...

 

May 21, 2012

FHA Loan Rules For Credit Qualifying Streamline Refinancing Loans

By Joe Wallace

FHA home loans aren’t just for new purchase mortgage transactions, there are also different types of refinancing loans available. FHA streamline refinancing, so named because of the reduced amount of paperwork and procedures associated with underwriting the refinancing, is one such option. FHA streamline loans come in two basic types–no-credit-check refinancing and credit qualifying refinancing loans. Borrowers may or may not be eligible for the no-credit-check version of the FHA streamline loan, depending on the circumstances. For borrowers who are applying for a credit qualifying FHA streamline loan, the FHA has a set of rules to be aware of–when applying for credit qualifying streamline refinances, the lender is required to do the following: –View and verify the borrower