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Articles Published in: 2012

September 12, 2012

Can an FHA Lender Enforce Special Requirements For Borrowers On Maternity Leave?

By Joe Wallace

The FHA and HUD issue press releases about enforcement activity related to the Fair Housing Act, which addresses issues and questions such as the one in our headline, “Can an FHA Lender Enforce Special Requirements For Borrowers On Maternity Leave?” To answer that question, let’s look at a boilerplate statement found in almost every FHA/HUD release about anti-discrimination cases. “The Fair Housing Act

 

September 11, 2012

FHA Loan Minimum FICO Score: A Reader Question

By Joe Wallace

A reader asks, “What is the lowest starting credit score?” This is a difficult question for some borrowers because the answer isn’t as straightforward as quoting the FHA loan rules. Individual lenders don’t have to require a standard identical to the minimum–they are free to require higher scores. For example, in a 2010 press release titled, “FHA Announces Policy Changes to Address Risk and Strengthen Finances ” the FHA and HUD announced a change for minimum FICO scores required in order to be approved for an FHA guaranteed home loan. The press release stated FHA and HUD planned to: “Update the combination of FICO scores and down payments for new borrowers. New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% | more...

 

September 11, 2012

FHA Loan Reader Questions: Foreclosure Seasoning Periods

By Joe Wallace

A reader asks, “Apparently 2 years ago a home that we sold out-right and even received cash back had a foreclosure initiated. We are in the process of trying to buy a home at this time. Our credit report looks great score of 650 to 720. We were told we were pre-approved. the day before we were suppose to close we got a call saying we were denied because there was an embedded code the underwriter found stating that a foreclosure had been initiated.” “We were told that according to FHA guidelines, you must wait 3 years after a foreclosure. Is this true? Although it didn

 

September 10, 2012

FHA Loan Reader Questions: Is A Physician Statement Required as Proof of Income for Disability Compensation?

By Joe Wallace

A reader asks, “I have been approved for an FHA home loan or so my loan officer told me. She said everything was good I had been approved, a closing date was selected and ten minutes later I get a text message from my loan officer that the underwriter requires one more document.” “I am on Social Security Disability, proof of all income was provided, but now the underwriter wants a letter from my doctor guaranteeing that my medical condition will not change for the next 3 years! No doctor can guarantee my health or anyone else’s, can the lender suddenly deny my loan? My doctor would look at me like I had totally lost my mind. Please help me with this.” Situations like this happen more often than you | more...

 

September 7, 2012

Seller Concessions, The Six Percent Limit, and Inducements to Purchase

By Joe Wallace

In our last blog post we discussed a reader comment about seller concessions. The reader asked a two-part question; “Has the percentage of incentives a seller can offer a buyer with an FHA loan changed yet from 6% to 3%? What if appliances and other things have been requested by the buyer which were covered under a separate sheet not the official home sale offer sheet?” At the time of this writing the FHA limit is still six percent. Some borrowers may be wondering what is meant by “seller concessions”; the FHA loan rule book describes them as contributions of “up to six percent of the lesser of the property

 

September 5, 2012

What Is the Maximum Loan for an FHA No Cash Out Refinancing Loan?

By Joe Wallace

A common question about FHA refinancing loans has to do with no cash out refinancing loan maximums. What is the maximum loan amount a borrower can apply for with a no-cash out refinancing loan with an appraisal? According to HUD 4155.1 Chapter Three, in the section titled, “Maximum Mortgage Calculation”, the following rules apply: “The maximum

 

September 5, 2012

FHA Loans and Homeowner’s Association Policies

By Joe Wallace

A recent press release issued by the FHA/HUD announced charges against a Florida homeowner’s association for policies the press release claims are in violation of the Fair Housing Act. According to HUDNo.12-145, “The U.S. Department of Housing and Urban Development (HUD) announced…that it is charging a Gibsonton, FL, homeowners association and its Tampa-based former management company with violating the Fair Housing Act by subjecting a family to different rental terms and conditions because they have six children.” The charges allege, according to the press release, “that Townhomes of Kings LakeHomeowners Association (HOA), Inc., and Vanguard Management Group, Inc., violated the Fair Housing Act by telling the family that they had too many people living in their rental townhouse and threatening to evict them if they didn’t reduce the number of | more...

 

September 4, 2012

FHA Announces Assistance For Louisiana Hurricane Isaac Victims

By Joe Wallace

Hurricane Isaac brought with it plenty of flooding and storm damage; the FHA and HUD have announced federal disaster assistance for affected areas in Louisiana. 35 parishes were affected by Isaac, and HUD Secretary Shaun Donovan has announced FHA/HUD relief efforts for “homeowners and low-income renters forced from their homes” due to the hurricane. According to a press release at FHA.gov, “President Obama issued a disaster declaration for Acadia, Allen, Ascension, Assumption, Avoyelles, Cameron, East Baton Rouge, East Feliciana, Franklin, Iberia, Iberville, Jefferson, Jefferson Davis, Lafourche, Livingston, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, and West Baton Rouge Parishes. The President

 

September 3, 2012

GFI Mortgage Bankers Settles Housing Discrimination Lawsuit

By Joe Wallace

The FHA/HUD official site has issued a press release stating that “GFI Mortgage Bankers Inc., a large independent home mortgage firm that concentrates on the New York, New Jersey, and Florida markets, will pay $3.555 million to resolve a lending discrimination lawsuit filed by the Department of Justice and the U.S. Attorney