Articles in Category: HUD Regulations

April 15, 2011

FHA Loans: Borrowers with Disabilities and the Fair Housing Act

Who is affected by Fair Housing act laws and related government regulations? The short answer; just about everyone. According to the FHA official site the Department of Justice and the Department of Housing and Urban Development share responsibilities for enforcing the Fair Housing act, and FHA borrowers have plenty of built-in ways to seek resolution in legitimate cases of discrimination. FHA and HUD have extensive resources to record, track, and investigate complaints from FHA borrowers about violations of the act. The Fair Housing act prohibits all types of housing discrimination, including “the refusal to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling” according to the FHA official | more...

April 13, 2011

FHA Anti-Discrimination Rules and HUD Fair Housing Grants

By Joe Wallace

As we’ve mentioned elsewhere in this blog, the FHA and HUD have strict anti-discrimination requirements built in to the FHA loan process. The Fair Housing Act prohibits discrimination in any part of the real estate process, and while the borrower is often the first line of defense in terms of reporting and identifying discriminatory housing practices, the FHA anti-discrimination system works. But no system is perfect, and the FHA/HUD continuously look for new ways to strengthen the system in order to provide equal credit and housing access to all applicants. The only thing that should determine whether an applicant can buy a home with an FHA-insured mortgage is whether or not the borrower meets FHA and lender qualifications for the loan. That’s one reason why HUD recently announced a $41million | more...

April 12, 2011

FHA Announces Settlement with First American Mortgage Trust

By Joe Wallace

On many occasions, we’ve discussed the FHA’s aggressive pro-consumer policies. When a borrower decides to apply for an FHA insured loan, there is plenty of legal protection against discriminatory lending practices. But the FHA doesn’t just look after the borrower’s interests–it also polices the industry where appropriate to insure a level playing field for all involved. The FHA has standards for fair lending, there are laws designed to promote equal access to credit for qualified borrowers, and there are also requirements to protect the FHA’s investment against lenders who are tempted not to exercise due diligence in making sure those borrowers are indeed qualified. A good example of this is the recently announced settlement between the FHA mortgagee review board and First American Mortgage Trust. According to an FHA press | more...

April 7, 2011

More on FHA Loans for More Than One Home

By Joe Wallace

In recent posts, we’ve discussed the FHA rules for borrowers who want to apply for a second FHA insured loan in addition to the one they already hold. Generally speaking, the FHA does not allow people to have two FHA home loans at the same time, but there is a degree of flexibility in the rules–borrowers who want to buy a second home with an FHA mortgage are only allowed to do so under specific circumstances. For example, someone who relocates to a new area that is not within a reasonable commuting distance from the first home may be allowed to apply for an FHA loan to purchase a second property. The same is true when a home owner outgrows the first home because it no longer has room for | more...

April 6, 2011

FHA Loans: Can A Borrower Have More Than One? (Part Two)

By Joe Wallace

In our last blog post we discussed FHA loans and whether a borrower can apply for a second one while maintaining the first. This situation is different than refinancing or getting a second mortgage–the situation in question involves the borrower’s ability under FHA regulations to buy another property with a new FHA insured loan. The FHA only allows this under specific circumstances. For example, a borrower who relocates to a new area outside a “reasonable commuting distance” may be allowed to apply for a second FHA loan to buy a new property in the new location. In such cases the borrower is allowed to apply for a new loan but isn’t forced to sell the old property. This makes the old home a possible rental unit under the right circumstances–the | more...

April 6, 2011

FHA Loans: Can a Borrower Have More Than One?

By Joe Wallace

For the typical home owner, applying for an FHA loan is a major financial commitment. The monthly mortgage payments are an important part of any budget and borrowers are encouraged to plan carefully before closing the deal to make sure they will be able to afford the loan over the lifetime of the FHA insured mortgage. Some FHA borrowers have circumstances that get them thinking about a second FHA loan for any number of reasons. Some borrowers decide to invest in real estate, others may be required to relocate to another state for career purposes, others may be non-occupying co-borrowers on an FHA loan. Can a borrower have more than one FHA loan at a time? On the surface, the FHA answer seems to be no. According to the FHA, | more...

March 31, 2011

What Does “Buying a HUD Home” Mean?

By Joe Wallace

The FHA loan program features a variety of loan products for qualifying borrowers to get into affordable housing by applying for a loan with an FHA guaranty. But the FHA doesn’t just guaranty loans, it also offers house hunters the option of purchasing property owned by the Department of Housing and Urban Development, also known as a “HUD home”. According to the FHA official site, “A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.” HUD homes are available to the public–not just FHA borrowers. Anyone may purchase a HUD home but getting one is a different process than | more...

March 31, 2011

FHA Loan Facts About Loan Applications

By Bruce Reichstein

If you’re new to the FHA loan process, there are many things to learn, and it’s easy to assume things about an FHA mortgage that might not be true. Did you know there are federal laws that require specific steps

March 30, 2011

FHA Loans and Fair Lending: The Schwab Settlement

By Joe Wallace

Recent headlines and press releases have called attention to the Fair Housing Act, and the FHA’s anti-discrimination policies for FHA loan applicants. The Department of Housing and Urban Development recently announced a settlement between Charles Schwab Bank and a Louisiana family after a Fair Housing Act complaint. FHA loan applicants and conventional borrowers alike are protected from discriminatory housing practices under the Fair Housing Act, which includes refusal to issue loans based on an applicant’s disabled status. According to a press release at FHA.gov, “Charles Schwab Bank has agreed to pay $30,000 settling allegations that the bank refused to accept a loan application from the adult son of a Metairie,

March 23, 2011

FTC Warns Borrowers of Mortgage Scams

By Joe Wallace

In an age of uncertainty in both the job and the housing markets, there are plenty of scams targeting homeowners fearful of losing their homes to FHA loan default and foreclosure. Anyone worried about defaulting on an FHA mortgage can be more vulnerable to a scam targeted to prey specifically on such fears; the FHA, HUD and the Federal Trade Commission issue regular warnings about mortgage scams. The best defense against companies and individuals who claim to offer relief, bailout programs or counseling–but don’t deliver–is knowing how such scams work. The FTC warns that con artists use a variety of tactics to find new victims. Some advertise on radio, television and websites; others conduct searches of public records to find names and addresses to send more personalized messages. Regardless of | more...