Articles in Category: HUD Regulations

July 24, 2014

FHA, HUD Announce Settlement In Housing Discrimination Case

The FHA and HUD have announced a settlement in a New Hampshire housing discrimination case. According to HUDNo.14-089, a tenant filed two housing discrimination complaints against TKB Properties and the New England Family Housing Management Organization. Those complaints were settled and the settlement announced in the HUD/FHA press release. “The U.S. Department of Housing and Urban Development (HUD) announced today agreements with the owners and managers of two Berlin, New Hampshire properties, settling allegations that they engaged in housing discrimination when they refused to rent to a woman who was a victim of domestic violence. The Fair Housing Act makes it unlawful to discriminate in the sale or rental of housing because of race, color, national origin, religion, sex, disability, or familial status.” “No woman should be denied housing based on | more...

July 23, 2014

FHA Loan Income Requirements: A Reader Question

By Joe Wallace

A reader asks, “My spouse is waiting an immigration process. Is there any way we can count all or partial income? My credit is at $800 and we have no other debts.” This is a difficult question to answer without knowing more. The big question is whether the spouse income is verifiable or not–FHA loan rules require all income to be used in the debt to income ratio calculation (which is an important part of the loan approval process) to be verifiable. What does this mean? Verifiable income is defined as earnings that are stable, reliable, and likely to continue. Verifiable income is not always “taxable income”–veteran benefits, for example, may be counted as income even though they are tax-exempt. But some types of income can’t be used. Non-verifiable income | more...

July 22, 2014

FHA Loans And Escrow Requirements: A Reader Question

By Joe Wallace

A reader asks, “I am trying to cancel my escrow acct. with (my lender) due to them selling my Mortgage loan to an undesirable finance company called (name deleted). I was informed that all FHA loans are required to have an Escrow account. Please inform me of my rights.” FHA loan rules do not require an escrow account in every case, but your lender might. According to the FHA/HUD official site, we find the following on the page titled HUD RESPA FAQs. The Real Estate Settlement Procedures Act, also known as RESPA, governs escrow accounts for home loans. Under RESPA there is no requirement for escrow. From the HUD official site: “Does RESPA require borrowers to maintain an escrow account? NO. It is the lender’s decision whether the borrower must | more...

July 16, 2014

New FHA HECM Deferral Period Rules Take Effect August 4 2014

By Joe Wallace

Recently the FHA and HUD updated requirements to the FHA Home Equity Conversion Mortgage (HECM) program to include something known as a deferral period for surviving non-borrowing spouses of those with HECM loans. What does this mean? According to the FHA official site, “For any HECM with a case number issued after the effective date of this Mortgagee Letter, in order to be eligible for FHA insurance, the HECM must contain a provision deferring the due and payable status that occurs because of the death of the last surviving mortgagor, if a mortgagor was married at the time of closing and the Non-Borrowing Spouse was identified at the time of closing.” “Specifically, the HECM documents must contain a provision deferring due and payable status until the death of the last | more...

July 15, 2014

New FHA Loan Rules For Deed-in-Lieu and Pre-Foreclosure Sale Options

By Joe Wallace

The FHA and HUD recently updated the rules for “non-home retention options” for borrowers at risk of going into default and/or foreclosure on FHA mortgage loans. Two of those options are deed-in-lieu (DIL) of foreclosure and the pre-foreclosure sale (PFS). Under FHA loan rules, the borrower must be evaluated for eligibility for one or both of these options, as described in FHA Mortgagee Letter 2014-15: “If none of FHA’s loss mitigation home retention options are available or appropriate, the mortgagee must evaluate the borrower for a non-home retention option. The priority order of FHA’s Loss Mitigation non-home retention options requires that a mortgagor in default or at imminent risk of default be evaluated for a PFS transaction before being evaluated for a DIL transaction. Therefore, the mortgagee must first determine | more...

July 9, 2014

FHA Reverse Mortgage Loan Rules For Occupancy: A Reader Question

By Joe Wallace

A reader asks, “My mother-in-law is sole owner of her home. she remarried and acquired a reverse mortgage. She is getting a divorce. unfortunately, she was force out of her house because of his violence. My question is how long can he live in the house if she is not there?” This situation calls for a lawyer–the laws of the reader’s state would definitely apply here. However, there is a very important FHA loan rule on HECM loans that borrowers need to be aware of and that definitely applies in this circumstance. FHA HECM loans require occupancy. A borrower who no longer occupies the home that secures an FHA HECM loan can and at some point definitely could have the entire loan declared due in full because failure to maintain | more...

July 8, 2014

FHA/HUD Announce Settlement In Discriminatory Ads Case

By Joe Wallace

The FHA and HUD have announced a settlement in a case involving discriminatory ads for housing. According to the press release found on the FHA/HUD official site, “The U.S. Department of Housing and Urban Development (HUD) announced today a Conciliation Agreement between the Connecticut Fair Housing Center (CFHC) and respondents Lil-1 Associates, AllPoints Realty and realtor Lillian Polak. The real estate companies will pay more than $24,000 to settle allegations that they published discriminatory listings and advertisements for condominiums specifying that children were not permitted.” Borrowers who want to buy a condo unit with FHA mortgage loans don’t always experience this type of illegal discrimination, but it’s good to know that if it does occur, FHA borrowers (or anyone looking to purchase a home or rent one) do have recourse | more...

July 4, 2014

Happy Independence Day!

By Joe Wallace

Today we’re pausing the normal day-to-day routine answering reader questions, writing about FHA home loan, and FHA-related news that affects you; we’re celebrating the Fourth of July holiday and our usual posting schedule will return on Monday. Thanks for reading and have a safe, happy holiday!

July 1, 2014

HUD Announces Settlement in Condo Housing Discrimination Case

By Joe Wallace

A press release at the FHA/HUD official site announces a settlement in a housing discrimination case featuring unlawful restrictions in a condo project. According to HUDNo.14-083, there’s an agreement between the Connecticut Fair Housing Center (CFHC) and a company called Lil-1 Associates, plus AllPoints Realty, and a realtor. “The real estate companies will pay more than $24,000 to settle allegations that they published discriminatory listings and advertisements for condominiums specifying that children were not permitted” according to the HUD press release. “The Fair Housing Act makes it unlawful to refuse to sell or rent housing on the basis of race, color, national origin, religion, sex, disability, or familial status. This includes refusing to allow families with children under 18 unless the property qualifies as housing for older persons.” Fair Housing laws | more...

June 24, 2014

FHA Appraisal Rules For Foundations: A Reader Question

By Joe Wallace

A reader asks, “We are up for a FHA refinance and the appraiser noted that we have a crack in our foundation. We have never had water in the basement ever and it hasn’t moved since i originally purchased the home. We are waiting to hear back from our lender. What is the likelihood this loan will be denied?” There are several issues that apply in a situation like this including the severity of the foundation problem. Not knowing that specific information makes it hard to know which way the call might go but it’s impossible to speculate what one financial institution might do. But that’s not the most relevant issue at work here. State or local building code may address the foundation issue specifically. If the home is not | more...