Articles Published in: October 2014

October 21, 2014

FHA Mortgage Rates and Recent Trends

Is now the right time to refinance your FHA or conventional home loan? Is now the best time to look into a new purchase FHA mortgage? Recent FHA loan rate trends do seem to point that way with rates having fallen into 16-month lows recently. Mortgage rates, as we reported last week, took a big move lower pushing FHA mortgage loan interest rates down from the previously long-held 3.75% range down to 3.5% (best execution). That means borrowers who have outstanding financial qualifications may find rates at or near these numbers available, while borrowers who may not necessarily qualify for the very best rates may also find lower-than-usual FHA rates while this trend lasts. Monday’s FHA interest rate trends had the recent move to 3.5% (a “best execution” rate available | more...

October 20, 2014

Basic FHA Condo Loan Rules

By Joe Wallace

If you’ve never considered owning or purchasing a condo unit before, you might be surprised to learn that the FHA single-family loan program does permit the purchase of approved condo units with an FHA loan. The rules for condo loans are different than for traditional single family houses because of the shared nature of the property, so borrowers should become familiar with the FHA requirements for condo loans. To begin with, what does the FHA classify as a condo? Take a look at the image above–could these houses be classified as condos? It depends partially on the nature of the housing market. In Chicago, for example, a house split into more than one dwelling could classify as a condo project if it meets certain FHA parameters–and in Chicago, such modifications | more...

October 17, 2014

FHA Loan Modification: A Reader Question

By Joe Wallace

A reader asks, “I have an FHA loan serviced by ******. I am trying to modify my loan. The Bank told me that I was eligible for modification. I repeatedly send all the forms, that they asked me to send. After six months they told me that they could’t modify because my income was low.” “Then they asked me to submit all the paper work again. While the paper work was in review they told me that they couldn’t modify because they had dropped the mortgage insurance. Even it was under review they turn the house to a trustee for sale, and also they gave me another excuse, that the investor (name deleted) didn’t want to modify my loan. I had to file chapter 13 in order to keep the house | more...

October 16, 2014

FHA Mortgage Loan Interest Rate Trends For October 13-17 2014

By Joe Wallace

If you are interested in an FHA home loan this week or have been keeping an eye on FHA mortgage loan rates, you know this has been a particularly good time for mortgage rates. For a large part of the year we have seen the best execution rates for FHA home loans persisting at around 3.75%, down from an earlier long-held best execution rate average at or just above 4%, depending on the lender. Volatile market conditions this week contributed to downward movement for interest rates–FHA mortgage rates have fallen from their long-held 3.75% comfort zone and fell into a range of rates between 3.375% and 3.5% best execution. Some borrowers may get confused over the reports of “best execution” rates–what does this term mean? “Best execution” mortgage loan rates are those | more...

October 16, 2014

HUD Awards Millions To Help Fight Housing Discrimination

By Joe Wallace

In recent weeks we’ve seen a variety of press releases from the FHA/HUD discussing settlements in cases where HUD investigated alleged violations of the Fair Housing Act and other anti-discrimination housing laws. Now, the Department of Housing and Urban Development has issued a press release announcing millions of dollars in federal funds being awarded to agencies trying to raise awareness of Fair Housing laws. According to HUDNo. 14-123, “The U.S. Department of Housing and Urban Development (HUD) today awarded $38.3 million to more than 100 fair housing organizations and other non-profit agencies in 43 states and the District of Columbia to address housing discrimination.” The HUD press release says that competitive grants in this area are funded via the HUD Fair Housing Initiatives Program, “to help enforce the Fair Housing | more...

October 15, 2014

FHA Loan Reader Questions: Minimum Property Requirements and Refinance Loan LTV

By Joe Wallace

Sometimes we get lengthy reader questions that require detailed answers, and other times we get quick, easy-to-answer questions. Today we field two of those from readers who want to know some FHA loan basics. Our first reader question: “What are the requirement for houses close to gas station?” It’s not clear exactly what the reader wants to know–more detail is needed for an in-depth answer, but we can probably assume the reader wants to know if there are FHA minimum property requirements for homes located near a commercial gas station. While the FHA loan rulebook doesn’t specifically address this situation, it should be noted that no home located within a “high pressure gas pipeline easement” can be eligible for an FHA home loan. Whether or not this pertains specifically to | more...

What you should know about FHA 203(h) Loans For Disaster Victims

October 14, 2014

FHA Loans and “Reasonable Commuting Distance”: A Reader Question

By Joe Wallace

A reader asks, “What is the maximum commuting distance allowed for a FHA financed primary residence?” This question doesn’t have a set answer, since the FHA does not spell out an exact mileage amount or specific driving time that would meet or exceed the notion of “reasonable commuting distance”. Let’s examine what the FHA loan rulebook, HUD 4155.1 Chapter Four Section B has to say about reasonable commuting distances. The information below is presented in the context of advising the lender on what is appropriate if an FHA borrower wishes to apply for a second FHA loan for the purpose of getting another home. This is generally not allowed, but exceptions can are are granted for increases of family size or a job relocation. From HUD 4155.1 Chapter Four: “A | more...

October 13, 2014

FHA HECM Loan Closing Costs: A Reader Question

By Joe Wallace

A reader asks, “What are the standard closing costs for FHA/HUD/HECM for my property with market value of 510,000.00 with 240,000.00 in debt?” FHA loan closing costs are not standardized–they vary depending on the market, the lender, the nature of the services required to underwrite and close the loan and other factors. State law can and often does affect certain types of loan transactions so there may be factors there that might not apply elsewhere. The Department of Housing and Urban Development publication “Shopping For Your Home Loan: HUD’s Settlement Cost Booklet” breaks down how things can are are charged, but only uses examples and does not come with set, across the board settlement costs–you won’t find a HUD publication that can tell you exactly how much the settlement costs | more...

October 10, 2014

FHA Home Loans and Maternity Discrimination: The Wells Fargo Case

By Joe Wallace

The FHA and HUD have taken a special interest in ending home loan discrimination against those who are pregnant or on maternity leave. Since 2010 HUD has received nearly 200 maternity leave discrimination complaints; the Fair Housing Act makes it a crime to “discriminate in real estate related transactions, including the provision of home mortgage loans, on the bases of race, color, national origin, religion, sex, disability, or familial status” according to the FHA official site. A recent HUD press release announces a major settlement between the Department of Housing and Urban Development and Wells Fargo Home Mortgage. According to HUDNo.14-124, HUD “has reached a $5 million settlement with Wells Fargo Home Mortgage, the nation’s largest provider of home mortgage loans, resolving allegations that the lender discriminated against women who | more...

October 10, 2014

FHA Mortgage Loan Rate Trends For The Week Ending October 10 2014

By Joe Wallace

When it comes to FHA mortgage loan rates–or mortgage rates in general for that matter–last month the rate trends seemed to be centered around small, persistent upward pressure on mortgage rates. In the earliest days of October we seem to be moving back into an improvement trend, and if rate behavior on Wednesday and Thursday offer any clues, it’s possible that the positive momentum could bring benefits into the start of the new week. 30-year fixed rate conventional mortgages are moving into 4.0% territory (best execution) and while best execution numbers haven’t changed for FHA mortgage loans yet, borrowers may find that depending on the lender more competitive closing costs could apply. It’s important to shop around for the best interest rate you can, and rates do tend to vary | more...