May 14, 2012
FHA Loan Reader Questions: Chapter 13 Bankruptcy and FHA Loans
A reader asks, “I want to buy a home for my family using FHA financing. My credit, income, assets, and work history meet the FHA requirements. My wife
Articles in Category: HUD Regulations
May 11, 2012
FHA and HUD Announce $202 Million Settlement With Deutsche Bank and MortgageIT
The Federal Housing Administration and the Department of Housing and Urban Development have announced a multi-million dollar settlement with Deutsche Bank and MortgageIT following a government lawsuit filed in 2011. According to an FHA/HUD press release, the United States government filed suit last year against MortgageIT (owned by Deutsche Bank) for “repeated false certifications to HUD in connection with the residential mortgage origination practices of MORTGAGEIT, a wholly-owned subsidiary of DEUTSCHE BANK AG since 2007.” The press release adds, “The suit alleges approximately a decade of misconduct in connection with MORTGAGEIT
May 10, 2012
FHA Loan Reader Questions: Flood Zones
A reader asks, “I live in a town that is considered a flood area regardless whether you’re on a hill or in the valley…will the FHA do a manufactured home loan considering the area?” FHA loan rules are specific when it comes to flood zones,and make a distinction between areas prone to flooding and something called the Special Flood Hazard Area (SFHA). The lender must make a determination whether a home is located in one of these special areas where appropriate. Your lender will likely require flood insurance as a condition of the loan when the property is in a known flood area. However, when a home is located in or near a Special Flood Hazard Area, the rules vary depending on the type of home. For example, where new | more...
May 2, 2012
FHA Appraisals: Who Is Responsible For Appraisal Quality?
One question about FHA home loans doesn’t usually come up unless someone in the FHA loan process is dissatisfied with the appraisal, but it’s a question asked often enough to be included in the FHA/HUD list of the most frequently asked questions: Who is responsible for the quality of an FHA appraisal? According to the FHA FAQ, “The lender is held responsible, equally with the appraiser, for the integrity, accuracy and thoroughness of an appraisal submitted to FHA for mortgage insurance purposes. FHA may pursue appropriate enforcement actions against both or either party for violations.” In Mortgagee Letter 2009-41, The FHA also says, “FHA requires that all appraisers performing appraisals of properties that will be security for FHA-insured financing be knowledgeable of FHA appraisal reporting requirements…” and, “Appraisals performed for | more...
April 6, 2012
FHA Kicks Off Fair Housing Month With Discrimination Settlements
The FHA and HUD begin Fair Housing Month by announcing settlements with lenders accused of violating the Fair Housing Act. Magna Bank and Home Loan Center have both settled with the FHA in cases where the lenders are accused of discriminating against women on maternity leave who had applied for home loans. According to a press release from the FHA/HUD, “The settlement agreement signed by Magna Bank requires the bank to pay one woman $14,085 for allegedly requiring her to return to work before her loan application could be approved. In another settlement agreement, Home Loan Center, Inc., agreed to pay a Las Vegas woman $15,000 for denying her application to refinance her mortgage because she was on maternity leave.” The Fair Housing Act, which went into effect 44 years | more...
April 2, 2012
FHA Loan Questions: Mortgage Insurance Premiums
A reader asks, “I thought that it was announced recently that FHA insurance premiums were being decreased not increased?” Effective June 11, 2012, FHA Up Front Mortgage Insurance Premiums (UFMIP) will decrease for certain types of FHA Streamline Refinance Loans. According to the FHA Mortgagee Letter 12-4, “For all SF Forward Streamline Refinance transactions that are
March 26, 2012
HUD Permanently Bars AmericaHomeKey From Doing Business With the FHA
The Department of Housing and Urban Development has issued a press release advising consumers that a company called
March 2, 2012
FHA Loan Rule Changes: Collections, Judgments and Payoffs
FHA loan rules are not set in stone, they are subject to change as new laws, new market conditions or other factors evolve. One set of recent changes to FHA mortgage loan rules has a direct effect on how some FHA loan applicants are approved–or disapproved–for FHA home loans. According to FHA mortgagee letter 2012-3, there are important revisions to the instructions for FHA lenders found in HUD 4155.1 .4C.2.E. which formerly stated: “FHA does not require that collection accounts be paid off as a condition of mortgage approval. However, court-ordered judgments must be paid off before the mortgage loan is eligible for FHA insurance endorsement.” Potential FHA loan borrowers who have outstanding debts sent to a collection agency are directly affected by recent changes in that old rule. The | more...
March 1, 2012
Why Was I Rejected For An FHA Home Loan?
We get many reader comments and questions about FHA insured home loans. Many of them involve the loan process, appraisal procedures and refinancing issues, but some people ask us why they were turned down for an FHA loan, or want to know about the rules concerning loan approval and denial. When an FHA home loan applicant is denied a loan, there are several things which must happen. Many borrowers rightly want to know the specific reasons they were turned down for a home loan and whether it’s possible to try again after addressing the concerns which led to having the FHA loan application denied. Did you know the lender is required to inform the borrower not only as to the reasons why the loan was turned down, but in some | more...
February 28, 2012
FHA Announces Mortgage Insurance Premium Increase
The Department of Housing and Urban Development and the FHA have announced a plan to increase FHA Mortgage Insurance Premiums. In a press release, HUD No. 12-037, it was announced, “As part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration