Articles Published in: November 2013

November 6, 2013

HUD Settles Bank Of America Maternity Leave Discrimination Case

The U.S. Department of Housing and Urban Development issued a recent press statement announcing, “Bank of America will pay $45,000 as part of Conciliation Agreements resolving allegations the lender discriminated against pregnant women seeking mortgage loans. HUD had alleged that the Bank of America refused to refinance the mortgages of two couples in California and Texas, because the women were on maternity leave.” We write a great deal of articles here about home loans, and one of the most important aspects of being an informed borrower is knowing your rights under the Fair Housing Act. As the FHA/HUD press release points out, refusing a mortgage or denying a borrower mortgage insurance because the applicant is pregnant or on family leave is a violation of the Fair Housing Act. “No lender | more...

November 5, 2013

FHA Loan Foreclosures: How Long Must a Borrower Wait To Apply Again?

By Joe Wallace

We’ve received a lot of reader questions in recent days about FHA loan eligibility issues, including queries on how long the borrower must wait after foreclosure on a previous FHA home loan before applying for a new FHA mortgage. FHA loan rules address this issue in HUD 4155.1 Chapter Four, Section A. In the section titled, “Eligibility for FHA-Insured Financing”, we find the following guidance to the lender under the subheading, “Waiting Period for Borrowers With Past Delinquencies, Defaults or Claims on FHA Loans”. It says: “If the borrower has had past delinquencies or has defaulted on an FHA- insured loan, there is a three-year waiting period before he/she can regain eligibility for another FHA-insured mortgage.” This waiting period is mandatory, though borrowers should ask their loan officer or contact | more...

November 4, 2013

FHA Loan Income Requirements: A Reader Question

By Joe Wallace

A reader asks, “I have a question about the FHA 3.5 percent down program. I know my scores are all in the high six’s lowest 637 highest 677 , I was told that I qualify for the loan but when push came to shove, I was told I needed my net income to be almost 4 times what i make now. What is or are the financial requirements to qualify for the program? Also, I am self employed and have been for over 5 years. I presume the rules vary from lender to lender, state to state, etc…I need to know if this lender purposely made up this story just to ‘show me the door’ so to speak.” We can’t speak for a lender’s intentions, so we’ll skip the last | more...

November 1, 2013

FHA Refinancing Loan Basics

By Joe Wallace

There are several different types of FHA refinance loans. One is known as an FHA Streamline Refinance, which is for borrowers with existing FHA mortgages. Another is the FHA’s cash-out refinancing option, and there’s also a no cash-out refinance loan where proceeds of the loan are used to pay closing costs and other expenses related to the new loan. Streamline loans can be offered with or without an appraisal, while cash-out and no cash-out loans both require one. The term of these refinancing loans depends on the type of loan. The FHA loan rules for refinancing loans are found in HUD 4155.1, which says, “The maximum term of any refinance with an appraisal is 30 years. The maximum term of a streamline refinance without an appraisal is limited to the | more...