Articles in Category: FHA Lenders

April 13, 2016

HUD Launches Improved Manufactured Housing Dispute Resolution Program

The Department of Housing and Urban Development has launched improvements to its manufactured housing dispute resolution program, according to a press release on the FHA/HUD official site. According to HUDNo.16-046, the program is designed to “help consumers and the manufactured housing industry to resolve disputes involving the purchase and installation of manufactured housing.” The HUD Office of Manufactured Housing Programs (OMHP) has created a new website for homeowners, manufacturers, retailers and installers to, “navigate the dispute resolution process in those states that do not have their own process” According to the press release, there are more than twenty states that don’t have their own manufactured housing dispute resolution programs. “HUD is updating its dispute resolution program in the following states: Alaska, California, Connecticut, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maryland, | more...

April 11, 2016

Department of Justice Announces Settlement In Wells Fargo Improper Lending Practices Case

By Joe Wallace

The Department of Justice has announced a settlement in the improper lending practices case brought against Wells Fargo. According to a DoJ press release, “…the United States has settled civil mortgage fraud claims against Wells Fargo Bank, N.A. (Wells Fargo) and Wells Fargo executive Kurt Lofrano, stemming from Wells Fargo’s participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program. In the settlement, Wells Fargo agreed to pay $1.2 billion and admitted, acknowledged and accepted responsibility for, among other things, certifying to the Department of Housing and Urban Development (HUD), during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when some of | more...

February 12, 2016

HUD Foreclosure Policy Updates: Reasonable Diligence and Delays

By Joe Wallace

Recently the FHA and HUD updated guidance to lenders with regard to foreclosures and the “reasonable diligence” required to make sure the foreclosure action happens in a timely manner. One of the biggest complaints about the foreclosure process is how long it can take for a financial institution or the entity that is to take possession of the property to do so. The new HUD guidelines require lenders to act in a reasonable time frame. According to mortgagee letter HUDNo.16-003, “…when foreclosure of a defaulted loan is necessary, mortgagees must exercise reasonable diligence in prosecuting the foreclosure proceedings to completion and in acquiring title to and possession of the property. However, the mortgagee letter adds: “When certain delays in completing foreclosure and acquiring possession are caused by circumstances beyond the | 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 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...

January 20, 2016

Proper Use Of The FHA Logo–Why You Need To Know

By Joe Wallace

The FHA and HUD have specific rules about how the FHA logo may be used by lenders and advertisers. To the typical loan applicant, this may seem to be completely irrelevant. The initial reaction to this information is likely to be, “So what?”. But if you receive third-party advertising, or see ads with the FHA logo used improperly, it may be an indication that there’s a potential scam in progress. Not all improper use of the FHA logo is evidence of fraudulent activity–sometimes ignorance of the FHA regulations that cover use of the government’s logos is a factor. But other times there may be a deliberate attempt to mislead a potential customer into thinking that the advertisement or offer is government-approved, government-sponsored, or government initiated. What do FHA loan rules | more...

January 15, 2016

HUD Housing Report: Rising Equity, Fewer Homeowners “Underwater”

By Joe Wallace

The Department of Housing and Urban Development (HUD) has issued a housing market report on its official site–“Measuring Progress in the Housing Market” examines the state of the market near the end of the old year and noted that equity is rising, while the number of homeowners still underwater in the wake of the Great Recession is going down. “As 2015 came to a close, we saw our housing market reach key milestones on the path to recovery homeowners equity rose again, the number of homeowners in negative equity continues to decline, and purchases of new homes increased. Its clear that we must continue to support programs that will allow more American families and homeowners to recover from the Great Recession.” HUD offers this report as a regular feature of | more...

December 30, 2015

FHA Appraisal Fees, Appraiser Integrity Rules In HUD 4000.1

By Joe Wallace

The FHA appraisal process is very important–it helps establish the fair market value of the home and insures that the home meets minimum standards. Just because a home passes the FHA appraisal process does not mean it is defect-free. It’s the borrower’s responsibility is to hire an independent home inspector for verification of the home’s condition in a more complete way than the appraisal. FHA loan rules published in HUD 4000.1 establish some guidelines and ground rules for appraisals, lenders, and others who might be in the home loan “food chain”. Did you know that the FHA does NOT set appraisal fees? That’s just one important aspect of the rules for this process found in HUD 4000.1. “The Appraiser and the Mortgagee or Mortgagee-designated third party will negotiate the appraisal | 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...

October 21, 2015

FHA Loans, HUD 4000.1, and HUD/FHA Mortgagee Letters

By Joe Wallace

We’ve written a great deal lately about the new FHA Single Family Home Loan policy handbook, HUD 4000.1. Since this was launched, it became the comprehensive reference for FHA loan policy for single family mortgages, refinances, etc. The old FHA loan rulebooks including HUD 4155.1 and HUD 4155.2 are still discoverable on the Internet and on the FHA/HUD official site, but they are included there for reference only and should not be taken as current FHA single family loan policy. But even with that in mind, one FHA/HUD practice that was active under the era of the previous policies and handbooks still remains–the FHA and HUD are still updating single family home loan policy (and others as appropriate) with FHA Mortgagee Letters (ML). While the FHA/HUD did publish a list | more...