Articles in Category: HUD Regulations

February 4, 2016

HUD Reaches Settlement In Home Loan Discrimination Case

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

FHA Appraisals: A Reader Question

By Joe Wallace

A reader got in touch recently to ask about an FHA appraisal. “…septic system…was discovered bad after closed on and moved in. The home had been for sale for over a year and unoccupied for 6-8 months. FHA appraisal didn’t do any inspection of this system and it appears they should have due to the length of time it hadn’t sold or been unoccupied. It has been replaced and trying to be compensated for the expense. Thoughts?” It’s very important for all borrowers to understand that an FHA appraisal is NOT a home inspection. Once complete, the FHA appraisal should not be taken as any sort of stamp of approval from the FHA that a home is free of defects. Borrowers should ALWAYS pay for the optional (but extremely important) | 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...

January 15, 2016

HUD Charges Three Foreclosure Rescue Companies With Fraud, Discrimination

By Joe Wallace

HUD is bringing charges against three California foreclosure relief/loan modification companies according to a press release issued on the HUD official site. According to HUDNo.16-002, the agency is bringing charges against, “…three Modesto, California, home loan modification companies and nine of their agents with violating the Fair Housing Act by targeting Hispanic homeowners” for their national origin. As mentioned in the press release, laws passed as part of the Fair Housing Act prohibit discrimination in housing transactions (to include rental properties, public housing, and mortgage loans” because of national origin. “Families struggling to stay in their homes need real help, not false promises that make a bad situation worse,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity, who was quoted in the press release. He adds, | more...

What happens to my FHA loan in a natural disaster?

January 11, 2016

FHA Home Loan Appraisals: Some Basics

By Joe Wallace

In 2015, the FHA and HUD published HUD 4000.1, a new and comprehensive rulebook for FHA single family mortgage loans. This new set of rules updated, revised, expanded, and restated FHA single family mortgage loan policies. One area critical to the entire home buying process with an FHA mortgage is the appraisal process, so we are examining this process as described in HUD 4000.1 to give you a better idea of FHA/HUD policy as it now stands with the new rules. HUD 4000.1 begins by defining its terms. The rules say the FHA appraiser is responsible for insuring a home to be purchased or refinanced (where an appraisal is required to refinance) meets FHA/HUD standards–Minimum Property Requirements (MPRs) and Minimum Property Standards (MPS). “The Appraiser must observe, analyze and report | more...

January 8, 2016

FHA Loans, Fair Housing Laws And Your Rights: One Family’s Fair Housing Story

By Joe Wallace

Fair Housing laws ensure that all who seek housing get fair and equal treatment. It doesn’t matter if you are a renter, a house hunter, or somewhere in between renting and owning; fair housing laws apply to you and assign certain rights and responsibilities depending on which side of the transaction you are on. We write about fair housing cases from time to time because acts of discrimination can and sometimes do affect the FHA loan process. The people discriminated against are sometimes the only ones standing in the way of future violations of fair housing laws–those who report the illegal treatment can get it stopped. The video above is published by the Department of Housing and Urban Development and is part of a HUD video project aimed at educating | 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...

December 28, 2015

HUD Announces Settlement With Real Estate Agency Charged With Fair Housing Act Violations

By Joe Wallace

Often when a violation of the Fair Housing Act occurs, it’s up to the victim to report the incident in order for the situation to be fixed. Those who fail to report such violations may not only cheat themselves out of a fair deal, but also allow such violations to continue to occur. Consider a recent settlement by HUD, which recently approved a pair of “Conciliation Agreements” with Delap Realty, LLC, of Northampton, Massachusetts, resolving allegations mentioned in an FHA/HUD press release that, “…the company and its agents violated the Fair Housing Act by discouraging families with children from renting over concerns the units might contain lead-based paint hazards.” Under the Fair Housing Act, it is illegal to deny or limit housing because a family has children. It’s also not | more...

December 14, 2015

HUD 4000.1 On Appraisal Expiration Dates

By Joe Wallace

Ever since the FHA and HUD published the new FHA single-family mortgage loan rule book, HUD 4000.1, we’ve been examining important sections of the rules to see what current FHA mortgage loan policy is; FHA and HUD announced there would be no comparison document outlining the myriad of changes from the old guidelines to new and that it was the reader’s responsibility to learn what current policy might be for any given FHA loan topic. With that in mind we started reviewing HUD 4000.1 and discussing important issues. One such issue is the FHA’s rules on appraisal expiration dates. FHA appraisals are generally valid for 120 days, but the rules in HUD 4000.1 add: “The 120 Day validity period for an appraisal (see Ordering Appraisals) may be extended for 30 | more...