Articles Published in: 2012

April 11, 2012

FHA Loan Questions: Mortgage Insurance Payments

A reader asks, “I am refinancing my home with FHA. I am financing $54,540.00 and the appraisal (by FHA) is $180,000.00. Since I have almost $125,000.00 in equity why are they making me purchase FHA mortgage insurance at $50.00 a month? How long will I have to pay this on a 30 year loan at 4.25%?” Mortgage insurance, also known as MIP, is required by the FHA because it protects the government and the lender against a loss should the borrower default on his or her FHA loan. FHA requirements include mortgage insurance for borrowers making a down payment of less than 20 percent. Mortgage insurance is also required on refinance loans and is included in various rules governing FHA refinancing loans such as the following: “The lender must determine | more...

April 11, 2012

FHA Loan Reader Question: Septic Systems

By Joe Wallace

A reader asks, “I am looking to buy a home in the middle of a suburban neighborhood that is the only house in the area (that we know of) that is on septic. Everyone else is on city sewer.” “Now if the FHA comes out with an appraiser to inspect the home/property, will they require that the home be hooked up to city? Or will they inspect the septic systems to make sure it’s in proper working condition? And will it pass if it is? And will they allow it to stay on septic?” Questions like this have a two-part answer. Part one is that local building codes and ordinances have much to do with the FHA appraiser’s decision. The home must live up to local code in order to | more...

April 10, 2012

FHA Loan Reader Question: Seller Contributions

By Joe Wallace

A reader asks, “My question: if the purchase price of a home I want to buy is 290,000 the maximum sellers concession can only be a maximum of 6% of the agreed price? Can it be more than 6% if the home values at a greater than 290k ?”

April 9, 2012

FHA Loan Questions: FHA Condo Approval

By Joe Wallace

A reader asks, “I own a unit in a condo building. I would like to buy another unit in the building, but I have been told by the board I cannot due to the FHA rule that not more than ten percent of the units in the building can be rented out.” “Of course if I bought the unit, I would then rent it out. Otherwise, the building could loss FHA financing.

April 6, 2012

FHA Kicks Off Fair Housing Month With Discrimination Settlements

By Joe Wallace

The FHA and HUD begin Fair Housing Month by announcing settlements with lenders accused of violating the Fair Housing Act. Magna Bank and Home Loan Center have both settled with the FHA in cases where the lenders are accused of discriminating against women on maternity leave who had applied for home loans. According to a press release from the FHA/HUD, “The settlement agreement signed by Magna Bank requires the bank to pay one woman $14,085 for allegedly requiring her to return to work before her loan application could be approved. In another settlement agreement, Home Loan Center, Inc., agreed to pay a Las Vegas woman $15,000 for denying her application to refinance her mortgage because she was on maternity leave.” The Fair Housing Act, which went into effect 44 years | more...

April 5, 2012

FHA Loan Reader Questions: Am I Being Discriminated Against?

By Joe Wallace

A reader asks, “My spouse and I recently found a home we like and applied for a FHA loan. I draw disability every month. I have provided the loan advisor with a letter from the Social Security office stating how much my monthly income is, why I became disabled, the date I became disabled, and the date in which I started drawing disability.” “The loan advisor keeps turning us down stating that I am not providing him with efficient information about my disability income. He keeps asking for forms stating that my disability is permanent or a date in which it may stop, prof that it is continuous, and he just sent an email stating, ‘Have you considered asking her primary care physician for a letter stating that her disability | more...

April 4, 2012

Facts About the FHA

By Joe Wallace

Recently we discussed a blog post written by acting FHA Commissioner Carol Galante, who writes about the current state of the FHA loan program. “We welcome a robust and healthy discussion of ways to further strengthen FHA,” she says in the blog post entitled The Facts on FHA, but such an exchange is only possible when it is based upon accurate information. Today, we have posted

April 4, 2012

The State of The FHA Loan Program

By Joe Wallace

Carol Galante is Acting Federal Housing Administration (FHA) Commissioner and Assistant Secretary for Housing. In that capacity she recently wrote a blog post on the official FHA/HUD blog titled, “The Facts On FHA” which included her take on several myths currently in circulation about FHA loans, the health of the FHA program and other topics. Galante writes, “The health of the FHA and management of its business have been frequent topics of discussion in the media and among our stakeholders in recent months.

April 3, 2012

FHA Mortgage Insurance Premiums

By Joe Wallace

Yesterday, we answered a reader question about FHA loan Mortgage Insurance Premiums. We were asked, “I thought that it was announced recently that FHA insurance premiums were being decreased, not increased?

April 2, 2012

FHA Loan Questions: Mortgage Insurance Premiums

By Joe Wallace

A reader asks, “I thought that it was announced recently that FHA insurance premiums were being decreased not increased?” Effective June 11, 2012, FHA Up Front Mortgage Insurance Premiums (UFMIP) will decrease for certain types of FHA Streamline Refinance Loans. According to the FHA Mortgagee Letter 12-4, “For all SF Forward Streamline Refinance transactions that are