November 2, 2011
Allied Home Mortgage Corporation is no longer allowed to do business with the FHA or HUD, according to a November 1, 2011 press release from the Department of Housing and Urban Development. “The U.S. Department of Housing and Urban Development
October 14, 2011
The FHA and HUD have announced the suspension of Michael Primeau, former President of Lend America, following Primeau’s guilty plea in a loan fraud scheme. Primeau is no longer permitted to conduct business with the FHA or HUD. According to a press release at FHA.gov, “The U.S. Department of Housing and Urban Development (HUD) today announced it is immediately suspending Michael Primeau, former President of Lend America, from doing any business with HUD following his admission that he engaged in a wide-scale mortgage fraud scheme.” “Specifically, Primeau pled guilty to charges he directed employees of Lend America, a former FHA-approved lender, to divert mortgage funds intended to pay off borrowers
July 12, 2011
FHA borrowers come to the bargaining table with a set of consumer protections on their side in the form of the Real Estate Settlement Procedures Act, or RESPA for short. One of those protections is a policy that lenders may not get any financial compensation for referring business to third parties such as home warranties, insurance, etc. This rule prevents a conflict of interest in the real estate industry; RESPA laws are designed to keep buyers from being steered towards goods and services based on hidden relationships between lenders and third parties. HUD recently issued a press release announcing a settlement involving Fidelity National Financial, which was found to have engaged in illegal kickbacks and referral payments. The press release says Fidelity National Financial, “engaged in a widespread and years-long | more...
June 10, 2011
FHA home loans are designed to be pro-consumer. While they don’t penalize a lender in any way, FHA loan rules do restrict the types and amount of fees, charges and other costs associated with borrowing. The mission of the FHA is to be fair to all parties, borrower and lender alike. The borrower doesn’t pay inflated fees, and the lender gets a loan guarantee from the government. The FHA offers referrals for housing counselors and advice to house hunters exploring their options under the FHA loan program. The FHA official site has plenty of sound advice for people trying to navigate the complexities of buying a home, getting the best price, and other aspects of becoming a home owner. A lot of it seems fairly obvious to experienced borrowers, but | more...
April 19, 2011
Recent announcements by the FHA and HUD have increased the pressure on housing market scammers, but consumers should still be on the lookout for warning signs of a scam artist at work. The most recent announcement from FHA/HUD comes in Mortgagee Letter 2011-17, which revises HUD
April 12, 2011
On many occasions, we’ve discussed the FHA’s aggressive pro-consumer policies. When a borrower decides to apply for an FHA insured loan, there is plenty of legal protection against discriminatory lending practices. But the FHA doesn’t just look after the borrower’s interests–it also polices the industry where appropriate to insure a level playing field for all involved. The FHA has standards for fair lending, there are laws designed to promote equal access to credit for qualified borrowers, and there are also requirements to protect the FHA’s investment against lenders who are tempted not to exercise due diligence in making sure those borrowers are indeed qualified. A good example of this is the recently announced settlement between the FHA mortgagee review board and First American Mortgage Trust. According to an FHA press | more...
March 23, 2011
In an age of uncertainty in both the job and the housing markets, there are plenty of scams targeting homeowners fearful of losing their homes to FHA loan default and foreclosure. Anyone worried about defaulting on an FHA mortgage can be more vulnerable to a scam targeted to prey specifically on such fears; the FHA, HUD and the Federal Trade Commission issue regular warnings about mortgage scams. The best defense against companies and individuals who claim to offer relief, bailout programs or counseling–but don’t deliver–is knowing how such scams work. The FTC warns that con artists use a variety of tactics to find new victims. Some advertise on radio, television and websites; others conduct searches of public records to find names and addresses to send more personalized messages. Regardless of | more...
March 11, 2011
There are many ads on television by private companies offering debt counseling services. But when it comes specifically to foreclosure avoidance, did you know you do not have to pay for counseling services? According to the FHA official site, “Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks
March 10, 2011
The FHA issues warnings to consumers about predatory lending, but many people don’t know what predatory lending practices are until there’s a string of headlines about one specific type of activity. Protecting yourself against fraud and unethical practices in the real estate business is much easier when you know what to look for. It’s not that the real estate business is rife with dirty tricks–it likely suffers from the same amount of fraud as any other major industry–but the stakes are obviously much higher when it comes to buying a home. That’s why the FHA has requirements in place to protect the borrower. Look at the types of fraud sometimes found in the marketplace and compare the FHA rules to those governing other types of loans and you’ll see a | more...
February 17, 2011
In our last post we discussed FHA loans and the list of RESPA Borrower's Rights--a collection of rights FHA loan applicants need to know before applying for an FHA mortgage loan. The ten areas covered under RESPA Borrower's Rights include informed borrower requirements such as full disclosure of all non-refundable loan fees and other charges, disclosure as to the final cost of the loan and other important details.