Articles Tagged With: Borrower’s Rights

December 19, 2012

FHA Loans, Scams, and Standard Procedures

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 12, 2012

FHA Loan Eligibility Rules–Who Is Automatically Disqualified?

By Joe Wallace

We get many questions about FHA loan rules for those who have had bankruptcies, foreclosures, loan defaults and other credit issues on their records. FHA loan rules are clear–having these issues in your credit history is not an automatic cause to reject a loan application, but the borrower must wait out a minimum “seasoning period” after foreclosure, bankruptcy, etc. But there are certain cases where a borrower IS automatically ineligible for an FHA loan. What are these situations? According to FHA loan rules as described in Chapter Four of HUD 4155.1 in the section titled “Basis for Rejecting a Borrower for Federally Related Credit” you’ll learn that an FHA loan applicant is “not eligible to participate in FHA-insured mortgage transactions if he/she is suspended, debarred, or otherwise excluded from participating | more...

December 12, 2012

Are Military Members Eligible For FHA Home Loans?

By Joe Wallace

Members of the Army, Navy, Air Force, and Marine Corps have a military benefit through the Department of Veterans Affairs that they can use to purchase a home with no downpayment in most cases, and several other perks. Some of those perks are very similar to FHA loans, such as the option to pre-pay or pay off the loan ahead of schedule without a penalty. But are military members who are eligible for VA loans also eligible for an FHA loan if they choose FHA over VA? Does having the option to apply for a VA home loan render them ineligible for an FHA mortgage instead? FHA loan rules do not exclude military members; there are many reasons why a borrowe may choose not to use his or her VA | more...

December 10, 2012

How FHA Loan Limits Work

By Joe Wallace

Recently the FHA announced the new maximum loan limits for 2013. These limits are normally revised annually, but sometimes changes in the law may cause the limits to be recalculated depending on the new regulations put into place. The FHA limits published for 2013 are in effect for the entire calendar year from 1 January 2013 to 31 December 2013 unless otherwise changed by law. According to the FHA official site, maximum loan limits are developed as follows: “The statutory provisions of the National Housing Act establish the maximum loan limits and mortgage amounts for all FHA mortgage insurance programs. Maximum loan limits vary depending upon the • specific program under which a loan is insured • number of dwelling units in the property (one to four units), and • | more...

December 7, 2012

FHA Refinance Loan Options

By Joe Wallace

Recent news headlines related to “fiscal cliff” include warnings of possible tax hikes, a loss of (or cap on) mortgage loan interest rate tax breaks and other bad-news type possibilities. Those headlines make some homeowners seriously think about refinancing their FHA mortgages–getting into lower interest rates and/or lower payments to offset the higher costs of owning a home should the fiscal cliff issue enter a worst-case scenario. While no homeowner should rush into such a decision, those who are ready to commit should know their FHA refinance loan options. According to the FHA official site, borrowers with FHA or conventional home loans have the following choices as described in HUD 4155.1 Chapter Three: “FHA insures several different types of refinance transactions, including –Streamline refinances of existing FHA-insured mortgages made with | more...

December 5, 2012

New Hampshire Gets FHA/HUD Hurricane Sandy Relief

By Joe Wallace

New Hampshire is the latest state to receive FHA/HUD relief in the wake of Hurricane Sandy. On Monday, December 3 2012, the FHA and HUD issued a press release announcing foreclosure relief, FHA loans and refinancing plus other help for those recovering from storm damage. According to HUDNo.12-184, “U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to the State of New Hampshire in addition to resources being provided by FEMA and other federal partners. HUD will provide support to homeowners and low-income renters forced from their homes due to Hurricane Sandy.” Some may wonder why at takes time for all areas to get such disaster assistance from the FHA and HUD. The answer is simple–these benefits become available once an affected region | more...

December 4, 2012

FHA Loan Rules For Maximum Loan Amounts

By Joe Wallace

Borrowers new to the FHA loan program naturally want to know how much they may be permitted to borrow with an FHA guaranteed mortgage loan. While there is no single, fixed dollar amount maximum for the FHA loan program in general, there are rules and guidelines that govern how much a qualified borrower can get. The FHA loan rules are described in a publication called HUD 4155.1, which includes the following in FHA loan limits: “The statutory provisions of the National Housing Act establish the maximum loan limits and mortgage amounts for all FHA mortgage insurance programs. Maximum loan limits vary depending upon the • specific program under which a loan is insured • number of dwelling units in the property (one to four units), and • geographic location of | 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...

December 3, 2012

FHA Loan Rules For Multiple Residences: A Reader Question

By Joe Wallace

A reader asks, “Any person individually or jointly owning a home covered by an FHA- insured mortgage in which ownership is maintained may not purchase another principal residence with FHA insurance, except in certain situations as described in HUD 4155.1 4.B.2.d.” “What are the exemptions? FHA loan rules, as published in HUD 4155.1 Chapter Four, Section B, state: “To prevent circumvention of the restrictions on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any borrower. FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance.” There are | more...

November 23, 2012

FHA Loans and Credit Scores Below 620: A Reader Question

By Joe Wallace

A reader asks, “My husband and I have a credit score of 536. We have 41,000 to put down on a house. Can I get an FHA loan. I applied with a bank but could not.” This reader question doesn’t specifically ask, but it does imply that the reader might be under one of the most common misconceptions about the FHA loan program–that the FHA itself is responsible for making loans, lending money or otherwise distributing funds. The FHA does not loan money or disburse funds. Instead, it guarantees the home loans which are issued by a participating lender. The lender is responsible for processing, approving or denying the FHA loan applications it receives. FHA loan applicants should know that while FHA minimum credit scores at listed at 500 and | more...