Articles Published in: March 2022

March 31, 2022

Mortgage Scams: Homeowner Beware!

Have you been contacted by a third party offering to refinance your FHA home loan? During the worst of the COVID-19 outbreak, there were reports about home loan scammers trying to trick people into applying for refinance loans, mortgage relief, and foreclosure avoidance measures that weren’t what they were advertised to be. Some fell prey to these scams, while others relied on “best practices” to help them avoid being fooled into thinking they might be dealing with a legitimate third party offering help. What are these best practices and how can you save your home from loan default and/or foreclosure or simply refinance your existing home loan without getting swindled? The first key is the nature of the contact with you, the homeowner. Did you initiate it or did it | more...

FHA Loan Approval and Late or Missed Housing Payments

March 30, 2022

What Hurts Your Chances For FHA Loan Approval

By Joe Wallace

What can stop your FHA home loan from getting approved? Knowing what the lender will do when confronted with common home loan problems can be half the battle for some. If you can anticipate the lender’s expectations for things like credit, verifiable income, reliable credit history, and other factors you can get a lot closer to loan approval. What You Should Know About FHA Home Loan Minimum FICO Scores Borrowers with FICO scores below 500 are not eligible for an FHA mortgage loan. Borrowers with credit scores above 500 but below 580 may technically qualify but these applicants must put 10% down rather than the lowest down payment possible of 3.5%. But those numbers are the FHA’s requirements. A participating FHA lender may have additional guidelines or requirements. Expect to | more...

March 28, 2022

HUD Announces Wisconsin Fair Housing Case

By Joe Wallace

The Fair Housing Act makes it illegal to discriminate against those who seek housing. Illegal discrimination includes sexual harassment, inappropriate questions about religion or orientation, family status, and much more. In spite of there being a federal law on the books that makes it a crime to discriminate at any stage of the housing process, some landlords, lenders, property owners, and property managers still insist on behavior that amounts to violations of this federal law. And all such violations bring a chilling effect to the entire industry including mortgage lending and real estate purchasing. One of the latest unfortunate examples of what we mean? The United States Department of Housing and Urban Development has announced Fair Housing charges against Leaf Property Investment, LLC, in Milwaukee, Wisconsin. Owner Sam Leaf and | more...

March 24, 2022

FHA Cash-Out Refinancing vs. VA Cash-Out Refinancing

By Joe Wallace

What are the major differences between VA Cash-Out Refinance loans and the FHA Cash-Out Refinance loan program? There are several, and some borrowers may have the option to consider both, including active duty military members, Reservists, members of the National Guard, veterans, and certain surviving spouses of military members who died as a result of military service. And then there are borrowers who are just trying to compare the options on the market. These house hunters may also be reviewing other home loan options such as USDA and conventional loans. What should people know about the FHA and VA versions of this refi loan option? As you can guess from the above, VA mortgages and refinance loans aren’t offered to the general public. Some sources report that in 2019 alone | more...

March 23, 2022

HUD Announces New Fair Housing Initiative

By Bruce Reichstein

The Department of Housing and Urban Development has announced a major effort aimed at reducing violations of the Fair Housing Act in the home loan appraisal process. The agency has submitted a PAVE action plan to President Biden. PAVE is also known as the Interagency Task Force on Property Appraisal and Valuation Equity. This plan is designed to help end what the FHA and HUD describe as “racial bias in the home lending and appraisal process” and is considered by the designers to be one of the most ambitious Fair Housing reforms in this part of the housing industry. PAVE is a multi-agency cooperative effort and includes cabinet-level leadership as well as independent entities. According to the HUD press release, the PAVE task force was announced on June 1, 2021, | more...

March 22, 2022

FHA Home Loans And Closing Day Delays

By Joe Wallace

Getting to your closing day can be challenging. There are fees and expenses to pay for, credit checks to submit to, negotiations with the seller, and more. And on top of all those details, there are issues that could slow down your home loan, and may in some cases even affect your closing day. Don’t assume that such issues are always the borrower or seller’s fault. There are many reasons why your closing day could be delayed or otherwise affected by circumstances. What Can Delay Closing Day? Many issues can affect your ability to close the loan. For example, what if the appraisal comes back with corrections or with a value that is lower than the asking price of the home? Those things may or may not require a rethink | more...

March 21, 2022

FHA Refinance Loan Q&A

By Joe Wallace

Thinking about a refinance loan but not sure where to start? There are some common questions about refinancing your home loan, we provide some answers to them below from cash-out refinancing to rehabilitation loans. When Can I Refinance My FHA Mortgage? That may depend on the type of refinancing you seek. You can get an FHA Cash-Out Refinance loan once you have owned and occupied the property for 12 months. For FHA Rate-And-Term Refinances, you can own the home for less than 12 months but the loan-to-value ratio will be lower than if you apply after having owned and occupied the home for more than 12 months. FHA Streamline Refinance options require you to own the home for at least six months. Can I Refinance A Non-FHA Mortgage Into An | more...

March 17, 2022

FHA Home Loan Options You Should Know

By Joe Wallace

How many different FHA home loans are there? Some people assume there is only one loan program addressing a variety of different housing types. In many cases that is true. The FHA 203(b) loan is offered for a variety of different home loans including one-to-four unit homes that you would find in a typical suburban area. But that loan can also be used to purchase a condominium unit, a townhouse, duplex, or mixed-use properties which are primarily residential. Some borrowers want to know if they can use an FHA 203(b) mortgage to purchase a manufactured home or modular home. FHA loans under the 203(b) program are also known as Title II mortgages. The FHA home loan you need to purchase a manufactured home is called a Title I mortgage. FHA | more...

March 16, 2022

Building Credit Before Your FHA Home Loan

By Joe Wallace

If you want to buy a home, especially if you are shopping for a house for the very first time, you may need to build credit in the year or more leading up to your application. First-time homebuyers who do not have a long credit history do well to consider building credit, which is not quite the same thing as repairing credit. That said, the procedures for building and repairing are often similar. One important thing to remember; you don’t need a credit card to build credit. Some credit reporting agencies give you the option of having recurring payments (such as cell phones, utilities, etc.) added to your credit report. These recurring payments can help establish a pattern of reliable payments, and you will need to make arrangements with each | more...

March 15, 2022

Fixing Your Credit Before Your FHA Home Loan

By Joe Wallace

If you are considering an FHA home loan, you’ll want to begin working on your credit as soon as possible. This is true even if you feel you have good credit–there are issues a lender sees on many credit reports that may complicate the loan approval process. These issues may or may not interfere with your credit score numbers but they could be a factor in the lender’s decision to approve the loan, offer a certain interest rate, etc. If the numbers aren’t the issue, some borrowers want to know what IS the issue? In some cases, there may be errors or information that should be disputed on the report because you don’t want your loan officer making decisions about your loan based on information that isn’t accurate. The credit | more...