Articles Published in: December 2014

December 12, 2014

FHA Appraisal Appeals: A Reader Question

A reader asks, “A buyer for my property secured an FHA approval and had a FHA appraisal performed. The appraisal was well below the contract price, so much so that it was below the County’s tax assessed value. Better comps and explanations were provided for the market area, but the appraiser would not amend the appraisal.” “The buyer went to another lender to but was told the previous FHA appraisal was valid for 6 months and a new appraisal could not be requested. Is this true, even if the circumstances were clearly presented?” In some limited cases an FHA appraisal may be appealed, but this would be handled on a case-by-case basis and would be at the FHA’s discretion. FHA loan rules do not permit borrowers to appeal an appraisal | more...

December 11, 2014

FHA Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I had moved out of my home while renovations were done to my property prior to getting an FHA re-fi I had an FHA appraisal done immediately after the repairs were completed.”” “However now the lenders says that because the property was vacant when the appraisal was done it appears that no one lives there and therefore they are not allowed to do a re-fi for this property and to compound the problem I have been told that every lender subsequent to this lender will say the same thing. Is this true?” It’s impossible to speak for all lenders–policies may vary from one financial institution to another. However, one thing to keep in mind is that FHA appraisals do have an expiration date and once that expiration | more...

December 10, 2014

FHA Loan Interest Rate Trends

By Joe Wallace

Plunging oil prices—plus stock market reaction to those lower oil prices–are among the factors over the last five trading days that have affected FHA mortgage rates. FHA loan interest rates have fallen to year-long lows, best-execution. There are other factors that can and do contribute to lower rates from day to day. One factor that could affect FHA loan rates this week is tomorrow’s 30-year Treasury auction. Borrowers who have not yet committed to an FHA mortgage rate lock should keep an eye on the news about that auction tomorrow to see how it may affect the current interest rate trend. At the time if this writing, 30-year fixed rate conventional mortgage loan rates are in a range that tops out, best execution, at four percent. The bottom end of that best | more...

December 10, 2014

HUD Announces Changes To Making Home Affordable Program

By Joe Wallace

If you go to www.FHA.gov and look under the Press Releases section, you’ll find a recent update to the HUD Making Home Affordable program–an update that could mean thousands of dollars for some who take part in that HUD program. Some borrowers who got into trouble with their mortgages during the housing market crisis were able to take advantage of the Making Home Affordable program; the most recent update is good news for those who have been successful in it. According to a recent HUD press release, HUDNo.14-150: “WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today announced enhancements to programs under Making Home Affordable (MHA) to better assist struggling homeowners and communities still recovering from the effects of the | more...

December 9, 2014

FHA Loan Credit Issues: A Reader Question On Disputed Accounts

By Joe Wallace

A reader asks, “I would like to know how to get an FHA loan, I had a Bankruptcy discharged in Aug. 2010. This is my problem I got a credit card to improve my credit score. I was paying faithfully, then another card company that I already had Two that company. I was paying faithfully on those accounts also.” “Well when the credit company took over that account I didn’t realize I now had 3 accounts with that bank. Another reason I didn’t know was, I moved and one statement was going to the old address. When the two statements came . So I would go onto the computer and pay my 2 accounts..My problem is on my credit report shows 30,60,30,60, 90 days late. What can I do to | more...

December 8, 2014

FHA Loan FICO Score Mininums and Late Payments: A Reader Question

By Joe Wallace

A reader asks, “We were living in Florida when the housing market crashed. I was in school and my husband was working. 2 mos after starting school my husband lost his job so we had no other option then to file bankruptcy and we tried 9 times to get our mortgage modified with [lender name deleted] and they NEVER helped us! after eight mos of trying to get a modification, we were served foreclosure papers. Our Bankruptcy was discharged July 2010 and our Foreclosure was Dec 2010…” “My credit score is 593 and my husbands is 585. There have been a couple CC payments that have been late but other than that we managed to pay everything on time, including our rent. Will we be able to qualify for Loan…Please | more...

December 5, 2014

FHA Loan Requirements For Credit Checks, Documentation

By Joe Wallace

FHA loan rules require your loan officer to perform credit and employment checks, examine the source of down payment funds, and verify your income. In order to accomplish this, the FHA requires the lender to get documentation from the source; the borrower cannot provide the lender with credit reports, for example, and must contact your employer directly for verification of your income and work history. The rules governing these procedures are found in HUD 4155.1 Chapter One, Section B. which includes permission for the lender to ask the borrower for “blanket authorization” as described below: “The lender may ask the borrower to sign a general authorization form that gives the lender blanket authority to verify information needed to process the mortgage loan application, such as •past and present employment records | more...

December 4, 2014

FHA Mortgage Loan Rate Trends

By Joe Wallace

The Thanksgiving holiday interrupted several days worth of falling mortgage loan rates. We saw gains over six business days (holiday weekend falling in between some of those days) with best execution interest rates moving back into the high three percent zone for 30-year fixed rate conventional mortgage rates. FHA rates benefited as well,–FHA mortgage rates fell (best execution) to 3.25%, and while in many cases we see FHA loan interest rates having a hard time breaking out of a comfort zone at the same time conventional rates change, December 1st saw FHA mortgage loan rates drop from the previous business day’s best execution rate of 3.5%, but would eventually settle into a range of numbers. FHA mortgage loan rates moved into that range of best execution rates following some upward | more...

December 4, 2014

FHA HECM Loan Changes: MIP

By Joe Wallace

We have covered a great deal of information regarding the recent changes to the FHA’s Home Equity Conversion Mortgage (HECM) program. One crucial area borrowers should be aware of included in these changes? HECM MIP rules. The mortgage insurance premium rules for FHA HECM loans now reflects an MIP percentage that varies depending on how much the borrower’s initial disbursement amount is. FHA Mortgagee Letter 2014-21 states: “HUD charges an initial MIP of 0.50 percent (0.50%) of the Maximum Claim Amount (MCA) when the mortgagor’s Initial Disbursement Limit or the Borrower’s Advance is 60% or less of the Principal Limit. HUD charges an initial MIP of 2.50 percent (2.50%) of the MCA when a mortgagor’s Initial Disbursement Limit or the Borrower’s Advance is greater than 60% of the available Principal | more...

December 1, 2014

FHA Loan Rules For Wells: A Reader Question

By Joe Wallace

A reader asks, “A property has a well under the garage floor which is accessed through a steel covering. Is this acceptable if the Health Dept approves it?” The answer to this question depends greatly on whether the well as described is acceptable under state or local building code. FHA loan minimum property requirements don’t overrule state and local building codes, so compliance with those codes would be required–in the appraisal process, if the appraiser notes a condition that does not comply with either FHA loan rules or state/local building codes, corrections may be required as a consition of loan approval. When it comes to wells, FHA rules printed in HUD 4150.2 state: ” A domestic well must be a minimum of 50 feet from a septic tank, 100 feet | more...