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Articles in Category: HUD Regulations

December 19, 2012

FHA Loans, Scams, and Standard Procedures

By Joe Wallace

In today’s world, protecting your identity, personal information, credit card numbers and Social Security data is crucial. There are plenty of warnings of identity fraud scams across all types of business, but lending and credit are especially vulnerable areas. Borrowers should always take steps to protect themselves against scammers; beware of third parties who contact you requesting your personal data by phone, e-mail, or even in person. All that said, there are some standard operating procedures borrowers should be prepared for that are NOT attempts to harvest your personal data. The key to knowing which is which–a scam versus a legitimate business transaction–is often how and when these procedures occur. For example, FHA loan rules state that a lender may need or require something called a “blanket authorization” in order | more...

 

December 17, 2012

FHA Loan Question: Minimum Property Requirements and “Old Wiring”

By Joe Wallace

A reader asks, “I’m looking to purchase a home though a loan from FHA. The home is old but only occupied by a single family, very nice condition in and out, but has old 100 amp wiring and has a old heating system. No problems with either. Will this affect the process of the purchase?” Questions like these are common, and before we answer it’s important to point out that the FHA itself does not lend money. It guarantees the home loan which is issued by a private lender. We only mention this because some reader questions are worded in such a way that it seems there may be a mistaken impression that FHA actually offers the loan money–it does not. With respect to this reader question, FHA loan rules | more...

 

December 4, 2012

HUD Charges Minnesota Condo Association With Discriminatory Policies

By Joe Wallace

There are plenty of options for those seeking FHA home loans who don’t want a home in the suburbs. Some want a condo unit, and while these types of loans can be a bit more complex due to certain requirements (FHA loan rules require condos to be on or added to a list of FHA approved projects) these types of loans are definitely available to qualified FHA loan applicants. Lenders prepare borrowers for the additional steps required in the condo loan process. What the borrower should not expect? Discrimination of any kind in that process. According to a recent press release on the HUD official site, “The U.S. Department of Housing and Urban Development (HUD) announced today that it is charging the homeowner association and property managers for an Edina, | more...

 

November 27, 2012

FHA and HUD Announce Extra Processing Time For Mortgages Affected By Hurricane Sandy

By Joe Wallace

On the FHA/HUD official site, borrowers will find a notice regarding the closing time requirements for loans affected by Hurricane Sandy. FHA loan rules have been temporarily modified to make exceptions for the normal closing time requirements for FHA borrowers in federally-declared disaster areas affected by Sandy. According to the FHA, ” In cases where there is no expectation of a material change in the loan application documentation, lenders closing on loans for properties located in Presidentially-Declared Major Disaster Areas affected by Hurricane Sandy will be granted an additional sixty days for all documents in the mortgage loan application at closing beyond the 120 days for completed construction or 180 days for new construction set out at HUD Handbook 4155.1 1.B.1.h.” Again, this announcement is only for what the FHA describes | more...

 

November 26, 2012

FHA/HUD Announce Foreclosure Protection For Delaware Storm Victims

By Joe Wallace

A recent press release issued by the FHA and HUD announces foreclosure protection and other relief for victims of storms in Delaware. According to HUDNo.12-173A, victims of Hurricane Sandy have more options now that three affected counties have been designated federal disaster areas. According to the press release, “President Obama issued a disaster declaration for Kent, New Castle and Sussex Counties. The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in these counties.” According to U.S. Housing and Urban Development Secretary Shaun Donovan, “Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said Donovan. “Whether it’s foreclosure relief for families with FHA-insured loans or helping these counties to recover, HUD stands | more...

 

November 14, 2012

FHA Appraisals: Are They As Strict As Conventional Loan Appraisals? A Reader Question

By Joe Wallace

A reader asks, “Are FHA appraisals generally more “strict” than traditional mortgage appraisals? I am questioning what types of repairs are generally required in advance of closing?” “Specifically, I am selling my owner-occupied home to buyers that are anticipating an FHA loan, but they have expressed concern about the appraisal process.” “There are cosmetic concerns at the house (rooms need paint, screen door should be replaced, missing shutter), but the well, septic, roof and furnace are all relatively new. Can you please clarify?” This question is difficult to answer for one simple reason–FHA appraisals require the home to live up to both FHA minimum property standards (MPRs) AND state/local building code. If FHA minimum standards are met, but local code compliance is not evident, FHA MPRs do NOT trump the | more...

 

October 30, 2012

FHA Warning On Scams Related to the National Mortgage Settlement

By Joe Wallace

In early 2012, a landmark mortgage settlement between five major lenders and the U.S. government was reached after complaints were filed regarding home loan abuses and foreclosure abuses. According to a Department of Justice press release dated March 12, 2012, “The Justice Department, the Department of Housing and Urban Development (HUD) and 49 state attorneys general announced today the filing of their landmark $25 billion agreement with the nation

 

October 23, 2012

FHA Loan Reader Questions: Bankruptcy and Foreclosure

By Joe Wallace

A reader asks, “My bankruptcy has been discharged for 3 years but the house has not been foreclosed on yet. Can I get an FHA loan?” There are several unanswered questions here that don’t allow a definitive answer. The nature of the bankruptcy (Chapter 7 or Chapter 14) plays a part in the answer. Is the house in foreclosure now? More information is needed to provide a clear answer. In general, FHA loan rules do require a “seasoning period” for bankruptcy and foreclosure. A home that is currently in foreclosure will likely interfere with a borrower’s attempts to get a new home loan of any kind. A home purchased with a government-backed loan that has been foreclosed upon may result in the borrower being indebted to the government. VA loans, | more...

 

October 18, 2012

Rules For Credit Reports Associated With FHA Loan Applications

By Joe Wallace

Some FHA loan applicants may consider the credit check something of a mystery. Borrowers should know and understand how the FHA loan application process works–including the credit check–as it can help better prepare the borrower for the preparation needed to get an FHA loan approved. What does the lender need–and get–from the credit check process? Many lenders rely on something known in the industry as the “three repository merged credit report” or TRMCR to gather the borrower’s credit information. According to FHA loan rules, this report must contain information on all credit inquiries made within the last 90 days, any credit and legal data “not considered obsolete under the Fair Credit Reporting Act (FCRA)” which may include the last seven years worth of information about bankruptcy, court judgments, lawsuits, tax | more...