Articles Published in: February 2016

February 11, 2016

FHA Loan Questions: The Importance of a Home Inspection

What is the difference between a home inspection and an FHA appraisal of a property to be purchased with an FHA mortgage loan? The appraisal is required, but not as complete as a home inspection (which is optional but vital to being a fully informed borrower). The FHA appraisal only insures the home meets MINIMUM standards and state/local building code. The confusion over FHA appraisals and home inspections is one reason why we sometimes get reader questions like the one that came in recently asking about a roof issue: “I have a question regarding our we bought in August 2014. When we 1st bought the home we were told that the roofing was fixed and replaced 3 yrs before we bought it. Well now we have leaks and mold and | more...

February 11, 2016

FHA/HUD Alter FHA Loan Foreclosure Timeline Rules

By Joe Wallace

There have been many changes to FHA/HUD foreclosure policy. The latest of those changes comes via FHA Mortgagee Letter 2016-04, which adjusts the foreclosure timeline to comply with federal regulations known as Regulation X. According to the mortgagee letter, a previous mortgagee letter (2015-21) has been superseded in its entirety by this new set of guidelines. The new mortgagee letter “…provides updated guidance relating to HUDs regulatory requirement for mortgagees to utilize a loss mitigation option or initiate foreclosure within six months of the date of default. Specifically, this Mortgagee Letter: –reiterates the existing eight automatic extensions available to mortgagees when they are unable to initiate foreclosure within the allotted timeframe; and –introduces two new automatic extensions to align with the Consumer Financial Protection Bureaus Regulation X.” Specifically, “The Consumer | more...

February 10, 2016

HUD Settles Connecticut Fair Housing Discrimination Case

By Joe Wallace

The Department and Housing and Urban Development and a group of Connecticut landlords have reached a settlement in a housing discrimination case. According to a HUD press release, “The U.S. Department of Housing and Urban Development (HUD) today announced an agreement with a group of Connecticut landlords to resolve allegations they discriminated against families with children. HUD reached the agreement with New Britain-based Green New Britain, LLC, and PBJ Management, and their on-site property manager for allegedly refusing to rent a two-bedroom apartment to a single mother and her two young children.” Violations of Fair Housing Act laws can affect the home buying process at every level. In this case, the victims were renters, but plenty of people seek rental housing while searching for a new home to purchase. The | more...

February 10, 2016

Mortgage Rate Trends: Moving Even Lower

By Joe Wallace

Normally we don’t post on a near-daily basis about mortgage rate trends, but this week is different as we’re seeing rates moving lower than they have been in quite some time, and it’s unclear how long this trend could last. So we’re paying more attention to this situation until things settle down…. Mortgage rates moved even lower on Tuesday, putting many conventional mortgage best execution rates into the mid-three percent range. At the time of this writing, our sources believe that this is a short-term shift due to economic forces, pending statements from the Fed, and market activity. How long the downward movement continues remains to be seen, but some market watchers point out that when the headlines about the Fed start coming out over the next two days, it | more...

February 9, 2016

HUD Updates Single Family Loan Foreclosure Policy

By Joe Wallace

One of the biggest complaints about the foreclosure process involves the length of time it can take for the lender to take ownership of a foreclosed property. This is important for many reasons, but delays in transfer of ownership can also result in delays in a borrower’s ability to become a property owner once more later down the line. The FHA and HUD have issued a mortgagee letter addressing this issue where FHA Title II and Reverse Mortgages are concerned. “Single Family Foreclosure Policy and Procedural Changes for HUD Title II Forward Mortgages and Reverse Mortgages” updates “Reasonable Diligence time frames” effective for all cases where the deadline for taking “First Legal Action to initiate foreclosure” occurs on or after January 1, 2016, according to the FHA/HUD official site. According | more...

February 9, 2016

Mortgage Rate Trends: Moving Lower

By Joe Wallace

Monday saw mortgage loan rates moving lower–some sources are labeling it the “lowest in a year”, and industry pros are urging borrowers who are undecided to lock in a mortgage rate commitment with the lender due to this move. At the time of this writing, 30-year fixed rate conventional mortgages are in a best execution range with 3.625% at the low end–more lenders are reported as offering this best execution rate than those offering the same or similar on Friday. FHA mortgage loan rates are reported at a best execution rate of 3.5% depending on the lender, but if the downward trend continues we’ll likely see this comfort zone change. It’s entirely possible that the new, lower rate won’t last long unless the downward trend persists. As always, the rates | more...

February 8, 2016

FHA Loan Mortgage Calculators: Three Types

By Joe Wallace

If you are in the planning stages of an FHA mortgage loan, one of the most important things you can do once you’ve checked your credit report and FICO scores is to examine your budget now and begin making plans to budget for the monthly mortgage payment you’ll be making once the loan is closed. There are mortgage calculators online that can help you do this–some help you calculate your mortgage with taxes and insurance, others help you to determine how much loan you can afford, and still others help you figure out how much you can borrow with your FHA mortgage. How Much Can You Afford To Borrow? One very helpful FHA loan calculator helps you determine the reasonable loan amount you can borrow. You’ll need to come to | more...

February 8, 2016

Mortgage Rate Trends: Holding Steady After Jobs Report

By Joe Wallace

Friday was a day that could have influenced rates in an important way in the short-term, but investors didn’t react much (in terms of activity that could influence mortgage rates) to the employment report issued–mortgage rates stayed where they’ve been more or less. Our sources report a few lenders may have repriced, but overall the mid-to-upper three percent best execution rates we’ve been seeing have remained through the weekend. 30-year fixed rate conventional mortgages are still being reported, best execution, between 3.625% and 3.75%. The upper number in that range is the formed “comfort zone” for FHA mortgage rates, which have dropped to a best-execution 3.5%. FHA rates tend to vary more among participating lenders, so your experience may vary based on the lender. As always, the best execution rates | more...

February 5, 2016

Why Use An FHA Loan Mortgage Calculator?

By Joe Wallace

When you are planning your home loan, there are many aspects to consider. The selling price of the home is only one of those aspect; borrowers will need to save money for closing costs, a home inspection, and make a monthly budget for the mortgage amount, plus taxes and insurance. Some of the planning phase of your FHA mortgage involve things like requesting copies of your credit reports–things with concrete numbers such as FICO scores and payment amounts. But when it comes to figuring out your mortgage payment, arriving at the actual number can be a bit tricky. That’s one reason why it’s a good idea to use an FHA mortgage calculator to help you arrive at a more accurate dollar amount for your monthly mortgage payment (projected, of course). | more...

February 4, 2016

HUD Reaches Settlement In Home Loan Discrimination Case

By Joe Wallace

The Department of Housing and Urban Development issued a press release this week announcing a $1.9 million settlement with a bank in Tennessee over a housing discrimination complaint. According to HUDNo.16-009, the settlement with First Tennessee Bank resolves “allegations that the bank discriminated against African-American and Hispanic applicants by denying them mortgage loans and by allegedly failing to place bank branches in minority-concentrated areas” according to the press release. The Fair Housing act makes it illegal to discriminate, according to the HUD official site, “in the terms, conditions, or privileges of sale of a dwelling because of race or national origin. The Act also makes it unlawful for any person or other entity whose business includes residential real estate-related transactions to discriminate against any person in making available such a | more...