Articles Published in: November 2014

November 6, 2014

HUD Resolves American Bank Housing Discrimination Case

The FHA and HUD have announced a resolution in a housing discrimination case brought by HUD against a Maryland-based lender. According to HUDNo.14-139, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has entered into an Initial Decision and Consent Order with American Bank, resolving HUD’s charge that the Rockville, Maryland-based lender discriminated against applicants with disabilities when it allegedly required applicants to provide documentation regarding their disabilities and attempted to obtain information about the nature and extent of those disabilities.” Federal Fair Housing laws state that it is a violation of federal law to discriminate against borrowers, “in the terms and conditions of a loan to an individual based on a disability, including imposing different application or qualification criteria. The Fair Housing Act also makes it | more...

November 5, 2014

FHA Loans and Social Security Numbers: A Reader Question

By Joe Wallace

A reader asks, “I live in a community state property. My husband does not have a social security number to run his credit. How can I proceed with a FHA loan without being able to run a credit report on my husband?” FHA loan rules are very specific when it comes to the identity and documentation requirements for all parties to be obligated on an FHA home loan. According to HUD 4155.1 Chapter One, Section B, the following applies: “All borrowers, including United States (U.S.) citizens, must have a valid Social Security Number (SSN) and must provide evidence of that SSN to the lender. The lender is responsible for • documenting an SSN for each borrower, coborrower, or cosigner on the mortgage • validating each SSN either through − entering | more...

November 4, 2014

FHA FICO Score Minimums: A Reader Question

By Joe Wallace

A reader asks, “If I only need a fico score of 580 to qualify for a FHA loan, why would my (lender name deleted) agent tell me that I need 600 score before he could preapprove me for a mortgage loan?” This reader question reveals a common misconception about the FHA single-family home loan program. It is true that the FHA does list a minimum FICO score for borrowers–borrowers who have FICO scores below 580 won’t qualify for the lowest downpayment amount of 3.5% and borrowers with scores below 500 don’t qualify at all. However, these score requirements are the FHA minimums, not the lender’s standards. Lender FICO scores can and do vary from the FHA loan rules–they can be more strict than the FHA loan rulebook’s own FICO requirements. | more...