June 22, 2012
FHA Streamline Refinancing Loans offer qualified borrowers a distinct advantage–there is reduced paperwork for FHA Streamline Loans, the borrower may in some cases be able to get the refinancing loan without an appraisal, and the result can be lower mortgage payments. FHA loan rules say of streamline loans, “Streamline refinances
June 21, 2012
FHA home loans require the borrower to submit employment information to the lender for verification. This is done for several reasons to include documenting the borrower’s income, stability of that income, and how long that income has been ongoing. FHA Loan rules, as described in HUD 4155.1 Chapter Four, Section D, state the following about income and employment: “To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held a position of employment. However, the lender must verify the borrower
June 20, 2012
A reader asks, “Can a I obtain an FHA loan with an unpaid charge-off reported on my credit report for over $10,000? I tried to pay/settle the debt, but the bank refuses to accept any payment because the account is in transition. The statute of limits has expired for the the bank to pursue debt collection; however, it has not been seven years for the account to be completely removed from my credit. I
June 19, 2012
The FHA official site has a special section for buyers interesting in purchasing HUD homes–properties that were once purchased with an FHA guaranteed mortgage but later foreclosed upon and now owned by FHA/HUD. According to the FHA page “About Buying HUD Homes”, these properties are single-family homes with one to four units, offered for sale to “recover the loss on the foreclosure claim.” Anyone can purchase a HUD home; “If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.” Since HUD homes are foreclosed properties, | more...
June 19, 2012
According to the Department of Housing and Urban Development, loan modification scams were so prevalent last year that such schemes made the Better Business Bureau’s list of top scams for 2011. FHA borrowers are not immune from such scam attempts; homeowners complain routinely about contacts from companies claiming to represent the FHA, HUD, and a variety of private lenders. The official site for the Federal Bureau of Investigation warns borrowers to get professional references from any third party contacting them with unsolicited offers of help. The FBI also cautions FHA and conventional borrowers, “…if you
June 18, 2012
In March of 2012, we reported the FHA’s pending changes to the rules regarding collections and judgment actions–changes which have been cancelled, at least for now, by the FHA and HUD. According to FHA Mortgagee Letter 12-03, there were important changes to the rules for borrowers with court judgments and/or collection actions on their record scheduled to take effect in July of 2012. Those changes included the following: “If the total outstanding balance of all collection accounts is equal to or greater than $1,000 the borrower must resolve the accounts (e.g. entered into payment arrangements with minimum three months verified payments- paid as agreed) or paid in full at the time of, or prior to closing.
June 15, 2012
There are federal laws in place to prevent housing discrimination on the basis of race, color, creed, national origin, religion, and any number of other factors which have nothing to do with a borrower’s financial qualifications for credit. The Fair Housing Act is one such law, but many other rules apply. No matter if a borrower is applying for a conventional home loan, a VA guaranteed mortgage or an FHA mortgage loan, lenders, brokers, agents, landlords and other parties cannot discriminate in any aspect of the housing process. That said, one important set of protections has been, until recently, missing from the rulebooks for those in need of FHA/HUD services and programs. But in recent times, the Department of Housing and Urban Development has finalized a new set of rules | more...
June 14, 2012
A reader asks, “I’m in the beginning process of doing a FHA streamline refi and from the articles I’ve read “FHA doesn’t allow lenders to include closing costs in the new mortgage amount of the streamline refinance.
June 13, 2012
A reader asks: “The FHA approves people with poor credit. I see on the website that FHA is getting home loans, can you tell me what are your credit guide lines?” FHA loan rules establish minimum credit requirements for loan approval, but borrowers should know that it’s a mistake to assume an FHA guaranteed mortgage is a “bad credit home loan” or similar products. Banks that participate in the FHA loan program have their own credit requirements–they are not forced to issue home loans to borrowers that don’t meet the financial institution’s minimum credit score requirements for home loans even if the borrower technically meets the FHA minimum credit score cutoff. That’s one reason why borrowers are encouraged to contact the FHA directly (1-800-CALL FHA) to learn about and arrange | more...
June 13, 2012
A reader asks, “We purchased our first home using an FHA loan – 5% down. We have outgrown our home due to an expanded family and we are looking to purchase another home that is bigger – is it possible to qualify for another FHA loan – we have at most 10% to put down towards a new home. Our plan would be to rent out this current home we have as it is in a good rental area. Any advice on how we can achieve this?” FHA loan rules, according to the official site at FHA.gov, include a restriction on issuing single-family mortgage loans to investors. Due to this restriction, the official site says, “FHA generally will not insure more than one mortgage for any borrower (transactions in which | more...