Articles in Category: HUD Regulations

May 28, 2015

HUD Announces Historic “Redlining” Settlement

Redlining, the act of discriminating against a group of people in the mortgage loan servicing process, is prohibited by the Fair Housing Act. Redlining often goes undetected as long as those being discriminated against don’t file a complaint with the government. When such complaints are reported to the FHA and HUD, they are taken seriously and investigated to insure violations of the Fair Housing Act don’t continue. This week HUD announced a historic settlement in a redlining case in HUDNo.15-064. “The U.S. Department of Housing and Urban Development (HUD) today announced an agreement with Associated Bank, N.A. (Associated) to resolve a disparate treatment redlining case, one of the largest redlining complaints brought by the federal government against a mortgage lender. At approximately $200 million, it is the largest settlement of | more...

May 26, 2015

The 2009 First Time Homebuyer Tax Credit: A Reader Question

By Joe Wallace

A reader asks, “Is the tax credit still available to 1st time new home buyers? If not, are there any other credits available that can help new home buyers? Will I be considered a new home buyer if I purchased a home just over 5 (2010) years and attempt to purchase a new one in 2015?” We can’t give out tax advice, as we aren’t tax professionals, so it would be necessary to contact the IRS directly to learn about any homebuyer-related tax credits that might be available for a given tax year. Tax law changes quite frequently and what was legal last year may not be allowed this year due to legislation, expiration of government programs, or other changes. That said, we can report that it appears that, based | more...

May 20, 2015

HUD Settlement In Pennsylvania Housing Discrimination Case

By Joe Wallace

The FHA/HUD official site has announced an important housing discrimination settlement between HUD and a housing authority in Pennsylvania. According to HUDNo. 15-055, “The U.S. Department of Housing and Urban Development (HUD) announced today a Conciliation Agreement with the Housing Authority of the City of Hazleton, Pennsylvania, settling allegations the housing authority discriminated against Hispanic households.” The agreement, the HUD press release states, resolves claims that the Hazleton, Pennsylvania housing authority, “violated the housing rights of Spanish-speaking applicants and tenants by requiring them to supply interpreters in order to communicate with housing authority staff and by denying them limited English proficiency services.” This, the press release states, is a violation of the Fair Housing Act. “When housing authorities accept HUD funding they are obligated to make their programs and services | more...

When Is An FHA Loan Better Than A Conventional Loan?

May 19, 2015

FHA Loans, Foreclosure, and Credit Reports: A Reader Question

By Joe Wallace

A reader asks, “Suntrust Mortgage foreclosed on me in 2010. I had asked for a loan modification and they closed anyway. I had an equity line and I just found out that was placed on my credit report. I found out that my home sold for more than the 1st loan but they never paid the 2nd line of credit, both being with suntrust. when I call suntrust, all they say is any information given will be used to collect a debt. I do not owe that amount on my credit report and they will not do anything about it.” “I am one of the 2,200 in north Carolina that was foreclosed on improperly. I will be retiring from a local government office soon and cannot get a loan due | more...

May 6, 2015

FHA Mortgage Loans and the Fair Credit Reporting Act (FCRA)

By Joe Wallace

Most FHA loan applicants are well aware when they apply for a new home loan that they are about to give permission to the lender to do an extensive review of FICO scores, loan repayment history, financial responsibility in general, income, and much more. But did you know that there are federal laws that govern how a lender must proceed in order to be fair during the process? These laws also explain in general what to do if negative credit information requires “adverse actions” such as denial of a loan application. The Fair Credit Reporting Act instructs lenders on how to proceed in such cases, and FHA loan rules in HUD 4155.2 Chapter One, Section B include the following: “The Fair Credit Reporting Act (FCRA) is intended to control collection | more...

May 5, 2015

Are You Ready For An FHA Home Loan?

By Joe Wallace

If you are considering an FHA home loan, are you ready to fill out the paperwork? Here are some important questions to ask if you are considering applying in the near future: What’s My Credit Score? If you don’t know your current credit score, chances are good that you are not prepared to begin filling out FHA loan paperwork. Before you commit to applying for a new home loan, it’s strongly recommended that you pull your most recent credit report, check your FICO scores and see what your lender will see when he or she requests the same information. If you don’t know what the lender will see, find out before the bank does. What Does My Payment Record Look Like? Have you missed ANY payments in the 12 months | more...

April 27, 2015

FHA Loan Appraisals and Lender Standards: A Reader Question

By Joe Wallace

A reader asks, “I have a client that is FHA approved, and has had their appraisal done but can not locate the well. Well and septic have been tested and municipality has signed off on both stating they were ok with the way they are.” “My clients lender says no way, must meet the 50′ set back, other lenders say we can do it as long as you have the letter from the township My buyers dont want to start over as they are set to close on the house they are selling in 2 weeks. How can one bank say something different from another while following FHA guidelines?” There are several unanswered questions to go along with this reader question–are the lenders interpreting local or state building code or | more...

April 27, 2015

FHA Loan Rules For Co-Borrowers: A Reader Question

By Joe Wallace

A reader asks, “In the case of two names on the deed (only one will be living in the home), are both incomes & debts considered for debt to income ratios?. Also is it required the mortgage co. listed on both of their Home owner Insurance?.” There are many issues that can affect the answer to this question. Are the two people married? Related by blood, marriage, or a family-type relationship? These are important issues that can affect how much the FHA is willing to guarantee on the loan and how much down payment is required. Also, state laws may affect how such a transaction is carried out, especially if the people buying the home are legally married. Community property states may have laws that govern how a lender is | more...

April 20, 2015

FHA Home Loan Rules On Fair Housing

By Joe Wallace

April is Fair Housing Month, and the FHA/HUD official site has a variety of resources for borrowers who want to know more about Fair Housing Act laws, and how such laws pertain to both borrowers and lenders. The FHA and HUD are quite serious about equal access to housing, but what do FHA home loan rules say about Fair Housing rules and how are participating FHA lenders expected to comply with those rules? HUD 4155.2 Chapter One, Section B has some important guidelines: “HUD is responsible for enforcing the Fair Housing Act. The Fair Housing Act, contained in 42 U.S.C. 3605, prohibits discrimination in residential real estate-related transactions, such as • making or purchasing loans or providing other financial assistance, and • the terms and conditions for making available loans | more...

April 16, 2015

FHA Loans and the Back To Work Program: A Reader Question

By Joe Wallace

A reader asks, “I filed Chapter 7 due to an increase in family size, from 4 to 9. My pay was gone before it hit the bank to pay bills & buy extra food. At the time I filed my credit score was a 680, no late payments. I now want/need to buy a home for me to live in I have a full time job. I kept one creditor & just purchased a new car to get to work. No late payments, will that qualify for the back to work program? I’m not looking to purchase anything out of my comfort zone.” The FHA Back to Work Program is something that may or may not be offered by participating FHA lenders; borrowers need to shop around for a lender | more...