Articles in Category: HUD Regulations

November 11, 2011

FHA Loans and Fair Housing Rules: Settlement Reached in Maternity Discrimination Case

FHA loans, like VA and conventional home loan programs, are subject to the Fair Housing Act, RESPA and other federal laws which work together to prevent discrimination in the housing market. One of the rules established by these laws concerns discrimination against home loan applicants based on their family status. That includes discrimination against FHA loan applicants based on pregnancy, single parenthood, the number of children in a given family, and other factors. Such discrimination is prohibited by federal law. The Department of Housing and Urban Development issued a press release on November 3, 2011, stating that it “has reached an agreement with Luxury Mortgage Corporation (LMC), a mortgage lender based in Stamford, Connecticut, settling accusations that the lender discriminated against a woman by denying her mortgage loan because she | more...

November 3, 2011

FHA Loans and Foreclosure Avoidance: Some Basics

By Joe Wallace

There have been several reader questions lately about the foreclosure process on FHA home loans. What options do FHA borrowers have when facing the risk of default and/or foreclosure on their FHA mortgages? A quick look at the FHA official site’s page on the subject of foreclosure avoidance at http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure reveals several options. One program known as HAMP is the Home Affordable Modification Program, which “lowers your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income to make your payments more affordable.” According to the FHA, a typical FHA loan modification under HAMP “results in a 40 percent drop in a monthly mortgage payment. Eighteen percent of HAMP homeowners reduce their payments by $1,000 or more.” Another program borrowers may consider is the Principal Reduction Alternative, | more...

November 2, 2011

HUD Suspends Allied Home Mortgage Corporation

By Joe Wallace

Allied Home Mortgage Corporation is no longer allowed to do business with the FHA or HUD, according to a November 1, 2011 press release from the Department of Housing and Urban Development. “The U.S. Department of Housing and Urban Development

October 26, 2011

When an FHA Loan Application is Denied

By Joe Wallace

Transparency in the lending process and informed borrowing are two of the most important issues related to the “front end” of FHA loans. Before you commit to buy, even before you turn in an FHA home loan application, it’s crucial to know what your rights as a borrower are and how those rights affect every step of the FHA loan process. Did you know you’re entitled to an explanation as to why an FHA loan application was denied? According to the FHA official site, the Equal Credit Opportunity Act (ECOA) governs lender responsibilities in this area. “If your application is denied, ECOA requires your lender or mortgage broker to give you a statement of the specific reasons why it denied your application or tell you how you can obtain such | more...

October 14, 2011

HUD Suspends Former Lend America President Michael Primeau

By Joe Wallace

The FHA and HUD have announced the suspension of Michael Primeau, former President of Lend America, following Primeau’s guilty plea in a loan fraud scheme. Primeau is no longer permitted to conduct business with the FHA or HUD. According to a press release at FHA.gov, “The U.S. Department of Housing and Urban Development (HUD) today announced it is immediately suspending Michael Primeau, former President of Lend America, from doing any business with HUD following his admission that he engaged in a wide-scale mortgage fraud scheme.” “Specifically, Primeau pled guilty to charges he directed employees of Lend America, a former FHA-approved lender, to divert mortgage funds intended to pay off borrowers

October 11, 2011

HUD Charges New York Real Estate Company With Fair Housing Act Violations

By Joe Wallace

On occasion you’ll find reports here about the latest actions brought by HUD against those in the housing industry suspected of violating the Fair Housing Act, RESPA, and other federal anti-discrimination laws. We write about these things for two reasons–one is to raise awareness of the issues, but the other is to remind FHA loan applicants and borrowers that there is recourse when anti-discrimination laws are violated. One of the reasons the FHA and HUD are able to bring legal actions against those who break these laws is because the victims file a complaint–the victim is often the first line of defense against those who discriminate. Without reporting the problem, the FHA and HUD have a much tougher time preventing housing discrimination. Many of the headlines we report have to | more...

October 5, 2011

FHA Loans and the Borrower’s Rights

By Joe Wallace

FHA mortgages have a number of features which make them more advantageous for qualified borrowers than many conventional loans. A low down payment requirement is one of those advantages, as is more forgiving requirements for credit history. Contrary to what some believe, there is also no maximum income limit for a typical single-family FHA home loan. In addition to these advantages, there are also a list of rights all borrowers have that protect them in the loan application and purchasing process. Did you know all borrowers have the right to know which fees are refundable and which are not should the loan agreement be canceled? You have the right to have these fees explained to you before you commit. Home buyers also have the right to be fully informed when | more...

September 29, 2011

FHA Loans Charges Wisconsin Landlord With Violation of Fair Housing Act

By Joe Wallace

The FHA official site reports charges against a La Crosse, Wisconsin landlord for violating the Fair Housing act, “for refusing to rent an apartment to an African American couple because of their race.” FHA press release 11-228 says, “HUD brings the charge on behalf of the couple, alleging that Geneva Terrace, Inc. and Victoria Gerrard, the owner of Geneva Terrace Apartments, and property manager Nicolai Quinn refused to show an apartment to the complainants. Additionally, they falsely represented to the couple and other black applicants that no units were available, while informing white applicants of available units and encouraging them to apply. The Fair Housing Act prohibits housing discrimination based on race.” What does this have to do with FHA home loans? Refusing to rent to a qualified tenant based | more...

September 16, 2011

FHA Loans: Chinese Drywall Update

By Joe Wallace

Earlier this year we posted an update on a study related to contaminated drywall imported from China; the FHA has issued several press releases regarding the contaminated product which may have been used to construct homes eventually purchased with FHA insured mortgages. In May 2010, a U.S. Consumer Product Safety Commission press release identified a group of manufacturers,

September 13, 2011

FHA Loans and Discrimination

By Joe Wallace

A recent press release issued by the Department of Housing and Urban Development underscores the FHA and HUD’s commitment to the Fair Housing act. The release details actions taken by HUD against a Wisconsin landlord for alleged violations of the Fair Housing Act. While a press release about a discrimination issue connected with rental property might not seem to have much to do with FHA home loans at first glance, it does underscore the need for FHA borrowers to report such discrimination wherever they encounter it in the loan or house hunting process. According to HUD press release 11-207, “The U.S. Department of Housing and Urban Development (HUD) is charging a La Crosse County, Wisconsin landlord with violating the Fair Housing Act for refusing to rent a house to a | more...