Articles Published in: 2012

May 4, 2012

FHA Loan Forbearance For Unemployed Home Owners

At the FHA official site, there is a page titled Avoiding Foreclosure. This page has a list of special programs and information on helping FHA borrowers avoid loan default and foreclosure. One such program is aimed at homeowners with qualifying FHA guaranteed mortgages who have lost their jobs. The program known as the FHA Special Forbearance Program was announced in July, 2011 and requires lenders to “extend the forbearance period for unemployed homeowners to 12 months. The changes to FHA

May 3, 2012

What is an FHA Streamline 203(k) Mortgage?

By Joe Wallace

There are many options with FHA home loans, including something called the FHA Streamline 203(k), which the FHA official site describes as follows: “The ‘Streamline’ (K) Limited Repair Program permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.” This is good news for borrowers who know their FHA appraisal requires certain improvements or corrections–it’s an option to consider if there’s a sticking point in negotiating such changes with the seller. Additionally, “…like the regular Section 203(k) program, Streamlined (k) is available: To augment an FHA Energy Efficient Mortgage (EEM), To insure the | more...

May 2, 2012

FHA Appraisals: Who Is Responsible For Appraisal Quality?

By Joe Wallace

One question about FHA home loans doesn’t usually come up unless someone in the FHA loan process is dissatisfied with the appraisal, but it’s a question asked often enough to be included in the FHA/HUD list of the most frequently asked questions: Who is responsible for the quality of an FHA appraisal? According to the FHA FAQ, “The lender is held responsible, equally with the appraiser, for the integrity, accuracy and thoroughness of an appraisal submitted to FHA for mortgage insurance purposes. FHA may pursue appropriate enforcement actions against both or either party for violations.” In Mortgagee Letter 2009-41, The FHA also says, “FHA requires that all appraisers performing appraisals of properties that will be security for FHA-insured financing be knowledgeable of FHA appraisal reporting requirements…” and, “Appraisals performed for | more...

May 2, 2012

FHA Loan Reader Question: Rules on PMI

By Joe Wallace

A reader asks, “My loan is 635,000 and my home is appraised at 795,000.

May 1, 2012

FHA Loans For Disaster Victims

By Joe Wallace

Every spring and summer, we report on local communities that become eligible for federal disaster relief, including FHA loans, FHA foreclosure relief and other types of assistance for those who have had homes damaged by natural disasters. One of the most recent examples was our blog post on the relief efforts for those affected by storms in Hawaii, and unfortunately that likely won’t be the only such post we’ll have to make in coming months as tornado season and hurricane season for 2012 approach. What does the FHA offer those affected by natural disasters? There are many programs, but one of the most widely used is the FHA’s Mortgage Insurance for Disaster Victims, also known as a Section 203(h) loan. According to the FHA, “This program helps victims in presidentially | more...

April 30, 2012

FHA Loans: How Can I Estimate My Monthly Mortgage Payment?

By Joe Wallace

One commonly asked question about FHA home loans involves the process of determining how much a borrower could pay on a monthly basis on the FHA guaranteed loan. For this purpose, the FHA official site refers potential borrowers to a loan calculator provided by GinnieMae.gov, which is designed to help borrowers get a general idea of what the costs might be per month based on user-provided details including the sale price of the home, the housing market that home is in, etc. Specifically, the loan calculator asks for the sale price of the property, the state and county where that property is, the term of the loan plus interest rate, and the amount of down payment. Once these fields are filled in, the GinnieMae.gov calculator returns the results with plenty | more...

April 27, 2012

FHA Loans: The Road To Refinance

By Joe Wallace

The official White House You Tube channel posted a video on April 18th, 2012, detailing the President’s plan for refinancing for borrowers. According to the YouTube post, “Brian Deese, Deputy Director of the National Economic Council, explains how President Obama’s plan would make it much easier for millions of American homeowners to refinance their mortgage and save hundreds of dollars every month.” This plan has been proposed, but has not been passed by Congress. As described in the video (see below at the end of this blog post), there are many advantages to refinancing, and the Obama plan would, if passed, offer more options for borrowers who need lower monthly payments and lower interest rates. But in the meantime, many FHA borrowers need refinancing and can’t afford to wait to | more...

April 26, 2012

FHA Loan Reader Questions: Refinancing Loan Interest Rates

By Joe Wallace

A reader asks, “If we have to wait till June 11, 2012 to refinance, can we lock in an interest rate now? Our loan was done Feb 2008, our insurance will be lowered but will the interest be at the now, low rate (below 4%)?” One important part of negotiating an FHA home loan with a specific lender is knowing how the FHA mortgage process works. According to the rules, the Federal Housing Administration does not set the interest rates on FHA mortgages; that’s up to the borrower and the lender to work out together. Borrowers are encouraged to shop competitively between lenders to find the best interest rate. From the FHA official site: “First, devise a checklist for the information from each lending institution. You should include the company’s | more...

April 25, 2012

FHA Loans: Shopping For Your Home

By Joe Wallace

The FHA and Department of Housing and Urban Development offer plenty of programs to help potential FHA borrowers learn about the process of finding a suitable property, understand the FHA loan application process, and much more. The FHA offers housing counseling referrals, links to FHA loan calculators, and provides a list of home buying programs offered in each state. But what about resources for those who haven’t gotten to the planning stages for an actual FHA home loan? What does the FHA offer to people who simply want to do research about FHA mortgage loans, buying a home, and becoming a home owner? There are a wide variety of resources available, but the FHA and HUD have offered some newer ones designed for people on the go, who want to | more...

April 24, 2012

FHA Appraisals and Reconsideration of Value

By Joe Wallace

When an FHA assigned appraiser submits his or her report and the fair market value of a given property is established, sometimes the buyer or seller may disagree with that determination of value. Can the FHA appraisal be appealed? There are some circumstances where a reconsideration of value may be warranted. According to the FHA, “A reconsideration of value is a request to the FHA Roster appraiser to reconsider the analysis and conclusions of his or her appraisal based on information that was not presented on the appraisal report, but was relevant to the appraisal and available to the appraiser in the normal course of business as of the effective date of the appraisal.” However, FHA rules also add that only “the lender