Articles Published in: 2015

November 17, 2015

Mortgage Rate Trends: Slightly Lower On Monday

Monday was the fourth day that mortgage loan rates didn’t move higher–and after six solid days previously of upward movement, that’s a welcome development. We’re seeing what appears to be a cautious, gradual move lower after that sustained upward pressure. How long that move lower might continue isn’t clear, but we are seeing rates move rather than simply maintain the previous day’s position. 30-year fixed rate conventional mortgage loans are closer to 4.0% (best execution) than they have been in many days. Some lenders may still be offering best execution rates closer to 4.125%, but if the downward trend persists we may see many more lenders headed towards the rock bottom end of the four percent range. FHA mortgage loan rates are still at 3.75%, best execution. You may see | more...

November 16, 2015

Temporary FHA Guidance Eases Condo Project Approval Requirements

By Bruce Reichstein

The FHA has issued a press release announcing temporary guidance that will make it easier to get a condo project added to the approved list for an FHA mortgage loan. According to HUDNo.15-145, the FHA/HUD, “published new guidelines under its condominium approval process intended to increase affordable housing options for first-time and low- to moderate-income homebuyers. Effective immediately, FHAs temporary guidance will streamline the agencys condominium recertification process and expand the eligibility of acceptable owner-occupied units to include second homes that are not investor-owned.” These new guidelines, the FHA press release says, will be in effect for one year, and will “serve to revise FHAs condominium approval process until the agency can implement a more comprehensive condominium rule change.” The new guidance, issued on the FHA/HUD official site on November | more...

November 16, 2015

Mortgage Loan Interest Rate Trends: Cautiously Improving

By Joe Wallace

For six days in a row, mortgage rates pushed higher. Then, for three days last week rates either leveled off or tried to improve. We’ve seen a general upward trend since Fed statements about a possible interest rate hike; the trends seems to be upwards for now in anticipation of the December Fed announcement that could reveal more about that possible rate hike. And in the meantime, breaking economic news or world events could also come together to influence rates depending on the nature of those headlines or events. It’s not just domestic economic news at work as an influencing factor on mortgage loan rates. All the talk of the Fed raising rates has markets and investors reacting in ways that put upward pressure on mortgage rates in general. 30-year | more...

November 13, 2015

FHA Home Loan Income Rules: Disability Income

By Joe Wallace

FHA loan rules in HUD 4000.1 have requirements for the lender to follow when it comes time to verify income. One type of income the lender may need to verify is disability income from SSI, the VA, or private disability benefits. HUD 4000.1 has this to say about this type of income, starting with a basic definition of terms: “Disability Benefits are benefits received from the Social Security Administration (SSA), Department of Veterans Affairs (VA), other public agencies, or a private disability insurance provider.” “The Mortgagee must verify and document the Borrowers receipt of benefits from the SSA, VA, or private disability insurance provider. The Mortgagee must obtain documentation that establishes award benefits to the Borrower.” The timing of such benefits is crucial, as HUD 4000.1 adds, “If any disability | more...

November 13, 2015

HUD 4000.1 Appraisal Rules: Required Repairs

By Joe Wallace

FHA loan appraisal rules found in HUD 4000.1 give the lender specific instructions on how to proceed with an FHA loan during the appraisal process. HUD 4000.1 has some very specific language that can help a borrower understand key issues surrounding FHA mortgage loans, including why an FHA appraisal should not be mistaken for a “home inspection” nor used in place of one. The FHA appraisal is carried out to make sure the home meets minimum standards, and where a home does not, require minimum repairs or corrections to the property to bring it up to minimum standards. According to HUD 4000.1: “As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUDs Minimum Property Requirements (MPR) and | more...

November 12, 2015

HUD 4000.1 On Lead Paint Disclosures

By Joe Wallace

Since the FHA and HUD published the new single family home loan rulebook, HUD 4000.1 earlier in 2015, we have been examining important aspects of that rulebook. The FHA changed/updated some portions of the rules, added other portions to existing regulations, and issued a message that lenders were expected to become familiar with HUD 4000.1 as a whole, rather than try to explain each and every instance of changed or modified policy in the new publication. So we’ve been tackling some of these relevant issues, discussing them individually as they appear in HUD 4000.1. One such issue has to do with lead paint disclosure requirements. HUD 4000.1 states, “If the Property was built before 1978, the seller must disclose any information known about lead-based paint and lead-based paint hazards before | more...

November 12, 2015

The FHA Appraisal Process: Selecting The Appraiser and Appraisal Integrity

By Joe Wallace

HUD 4000.1, the new FHA single family home loan rulebook, has specific instructions to participating FHA lenders about the appraisal process. An appraisal is required as we learn from this line in Part II Section A of the rulebook: “The Mortgagee must order a new appraisal for each Mortgage or refinance case number assignment and may not reuse an appraisal that was performed under another case number, even if the prior appraisal is not yet more than 120 Days old.” The mortgagee, or participating lender, is required to insure the integrity of the appraisal process as follows: “Appraisers must comply with the Uniform Standards of Professional Appraisal Practice (USPAP), including the Competency Rule, when conducting appraisals of Properties intended as security for FHA-insured financing.” “In appraising any Property for the | more...

November 11, 2015

Happy Veterans Day 2015

By Joe Wallace

Today is Veterans Day. Many banks will be closed, bond markets are closed, and we pause in our usual routine of answering questions about FHA home loans to celebrate the holiday. Today is a day to thank a veteran for his or her service, and remember the sacrifices our troops have made. To all current and former members of the U.S. military, THANK YOU for your service! Our regular posting schedule resumes tomorrow.

November 10, 2015

Mortgage Rate Trends: Highest Since Summer

By Joe Wallace

Monday say mortgage loan rates move higher for yet another day in a row, putting rates at their highest best-execution numbers since mid-summer. Much of the upward trend at present is blamed on Fed discussions of an interest rate hike, and it seems likely (at least according to our sources) that a December rate increase could be on the table. Any talk of rising rates at this point or indications that the Fed might be inclined to raise them could put more upward pressure on mortgage loan rates due to investor reaction to such news or indicators. Some of those indicators don’t come from the Fed directly, but from economic data releases the Fed is likely to take into consideration when it comes to the overall health of the economy | more...

November 9, 2015

Are FHA Loans Permitted For Living Trusts?

By Bruce Reichstein

Here’s a question that doesn’t come up that often, but is still an important aspect of the FHA loan program you might one day need to know: Are FHA home loans available for living trusts? The new FHA single family home loan rules published in HUD 4000.1 address this issue. The rules state: “The Mortgagee may originate a Mortgage for a living trust for a Property held by the living trust, provided the beneficiary of the living trust is a Cosigner and will occupy the Property as their Principal Residence, and the trust provides reasonable means to assure that the Mortgagee will be notified of any changes to the trust, including transfer of beneficial interest and any changes in occupancy status of the Property.” Note the occupancy requirement, which is | more...