Articles in Category: HUD Regulations

October 16, 2014

FHA Mortgage Loan Interest Rate Trends For October 13-17 2014

If you are interested in an FHA home loan this week or have been keeping an eye on FHA mortgage loan rates, you know this has been a particularly good time for mortgage rates. For a large part of the year we have seen the best execution rates for FHA home loans persisting at around 3.75%, down from an earlier long-held best execution rate average at or just above 4%, depending on the lender. Volatile market conditions this week contributed to downward movement for interest rates–FHA mortgage rates have fallen from their long-held 3.75% comfort zone and fell into a range of rates between 3.375% and 3.5% best execution. Some borrowers may get confused over the reports of “best execution” rates–what does this term mean? “Best execution” mortgage loan rates are those | more...

October 16, 2014

HUD Awards Millions To Help Fight Housing Discrimination

By Joe Wallace

In recent weeks we’ve seen a variety of press releases from the FHA/HUD discussing settlements in cases where HUD investigated alleged violations of the Fair Housing Act and other anti-discrimination housing laws. Now, the Department of Housing and Urban Development has issued a press release announcing millions of dollars in federal funds being awarded to agencies trying to raise awareness of Fair Housing laws. According to HUDNo. 14-123, “The U.S. Department of Housing and Urban Development (HUD) today awarded $38.3 million to more than 100 fair housing organizations and other non-profit agencies in 43 states and the District of Columbia to address housing discrimination.” The HUD press release says that competitive grants in this area are funded via the HUD Fair Housing Initiatives Program, “to help enforce the Fair Housing | more...

What you should know about FHA 203(h) Loans For Disaster Victims

October 14, 2014

FHA Loans and “Reasonable Commuting Distance”: A Reader Question

By Joe Wallace

A reader asks, “What is the maximum commuting distance allowed for a FHA financed primary residence?” This question doesn’t have a set answer, since the FHA does not spell out an exact mileage amount or specific driving time that would meet or exceed the notion of “reasonable commuting distance”. Let’s examine what the FHA loan rulebook, HUD 4155.1 Chapter Four Section B has to say about reasonable commuting distances. The information below is presented in the context of advising the lender on what is appropriate if an FHA borrower wishes to apply for a second FHA loan for the purpose of getting another home. This is generally not allowed, but exceptions can are are granted for increases of family size or a job relocation. From HUD 4155.1 Chapter Four: “A | more...

October 10, 2014

FHA Home Loans and Maternity Discrimination: The Wells Fargo Case

By Joe Wallace

The FHA and HUD have taken a special interest in ending home loan discrimination against those who are pregnant or on maternity leave. Since 2010 HUD has received nearly 200 maternity leave discrimination complaints; the Fair Housing Act makes it a crime to “discriminate in real estate related transactions, including the provision of home mortgage loans, on the bases of race, color, national origin, religion, sex, disability, or familial status” according to the FHA official site. A recent HUD press release announces a major settlement between the Department of Housing and Urban Development and Wells Fargo Home Mortgage. According to HUDNo.14-124, HUD “has reached a $5 million settlement with Wells Fargo Home Mortgage, the nation’s largest provider of home mortgage loans, resolving allegations that the lender discriminated against women who | more...

October 10, 2014

FHA Mortgage Loan Rate Trends For The Week Ending October 10 2014

By Joe Wallace

When it comes to FHA mortgage loan rates–or mortgage rates in general for that matter–last month the rate trends seemed to be centered around small, persistent upward pressure on mortgage rates. In the earliest days of October we seem to be moving back into an improvement trend, and if rate behavior on Wednesday and Thursday offer any clues, it’s possible that the positive momentum could bring benefits into the start of the new week. 30-year fixed rate conventional mortgages are moving into 4.0% territory (best execution) and while best execution numbers haven’t changed for FHA mortgage loans yet, borrowers may find that depending on the lender more competitive closing costs could apply. It’s important to shop around for the best interest rate you can, and rates do tend to vary | more...

October 9, 2014

HUD Settles “Redlining” Discrimination Complaint

By Joe Wallace

Have you ever wanted to apply for an FHA home loan only to experience what may be illegal discrimination forbidden by the Fair Housing Act? In some cases the discrimination may not even reach the borrowers themselves, as evidenced by a recent settlement announced by the HUD official site. According to a October 2014 press release issued on the FHA/HUD official site, “The Department of Housing and Urban Development (HUD) announced today that it has negotiated a Conciliation Agreement with Illinois-based Midland States Bancorp, resolving allegations that the bank avoided doing business in predominantly African American and Hispanic neighborhoods in St. Louis, Missouri and northern Illinois.” Federal Fair Housing Act laws state that it is illegal to, “deny or discriminate in the terms and conditions of a mortgage or loan | more...

October 7, 2014

FHA Loan MIP Rules: A Reader Question

By Joe Wallace

A reader asks, “We acquired FHA loan last April 2010 and refinanced it twice. Our original loan was 410k and our current bal is 383k. How can we eliminate the MIP and loan APR is 3.25%.” Last year, FHA Mortgagee Letter 2013-04 announced changes to FHA loan policy for mortgage insurance premiums. That policy was altered to require MIP payments for the maximum duration allowed by law on FHA loans. According to the FHA official site: “For loans with FHA case numbers assigned on or after June 3, 2013, FHA will collect the annual MIP for the maximum duration permitted under statute. See 12 U.S.C. § 1709(c)(2)(B).” “For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP) less than or | more...

October 6, 2014

FHA Loans, Projected Income: A Reader Question

By Joe Wallace

A reader got in touch with a question related to our post “FHA Loan Answers: New Job Income” which included the following: “Many FHA loan applicants want to know if taking a new job will affect their chances at FHA loan approval. FHA loan rules are designed to help guide loan officers through the qualification process for a variety of scenarios including those where the borrower may have “projected income” that could be factored into the borrower’s debt-to-income ratio. What do FHA loan rules say about projected income? How is it defined? The answers to these questions and more can be found in HUD 4155.1 Chapter Four, Section E. “Projected income is acceptable for qualifying purposes for a borrower scheduled to start a new job within 60 days of loan closing | more...

October 3, 2014

FHA Mortgage Rate Loan Trends For The Week Ending Friday October 3 2014

By Joe Wallace

For entire year to date, September was one of only a handful of months that had consistently upward movement in mortgage loan interest rates. Many house hunters and investors welcomed the end of September after some steady upward pressure on rates that finally started slacking off toward month’s end. FHA mortgage rates at the end of the month have seen small improvements but this week marked a push back to the summer’s lows. FHA mortgage rate trends were up and down the week ending October 3, 2014; rates pushed slightly higher on the last day of the month, but the first day in October brought with it more improvement in rates that had started off small in the second half of September. The first day of October helped erase most, if | more...

October 3, 2014

FHA Loans After Bankruptcy and Foreclosure: A Reader Question

By Joe Wallace

A reader got in touch with us recently with a lengthy question. We won’t run the entire correspondence, but the question goes as follows: “I filed Bankruptcy over 3 years ago and it was discharged in June of 2011. Included in that Bankruptcy was the current house we had purchased. On my credit report it clearly shows that the loan to that property was part of the bankruptcy and was discharged in June of 2011. We are trying to buy again under an FHA Loan and we were almost done when the underwriter found that the deed to the property we included in the bankruptcy did not get changed out of our name and into the bank’s name until…22 months later.” “We were denied financing because that only left us | more...