Articles Tagged With: Borrower’s Rights

October 11, 2012

FHA Loan Reader Question: Title I Loans For Remodeling/Rehab

A reader asks, “I am interested in borrowing a small amt. of money for remodeling my home. Is there any way I can qualify for an FHA loan for this purpose? I have never had bankruptcy, never missed a payment, never defaulted on any loan…” Something called a Title I Home Improvement loans are described on HUD.gov as a way to do just what this reader question describes. According to the official site on the page titled “About Title I Home Improvement Loans” you’ll find the following description: “HUD insures private lenders against loss on property improvement loans they make. The applicant must have a good credit history and the ability to repay the loan in regular monthly payments. Both large and small improvements can be financed. Search HUD’s list | more...

October 8, 2012

HUD Reaches Settlement in Pennsylvania Discrimination Case

By Joe Wallace

On the FHA/HUD official site you’ll find a press release announcing a settlement in a discrimination case against a Pennsylvania company that allegedly discriminated against families because of their national origin. According to HUDNo.12-160, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached a Conciliation Agreement with the Lancaster, PA-based Ecklin Group that will end an alleged policy of refusing to rent to Burmese refugee families.” The press release adds, “The agreement is the result of a complaint HUD initiated against the Group after company staff allegedly failed to renew the leases of three Burmese families because of their national origin, and made statements to various people that the group would no longer accept rental referrals for refugees that were referred by Lutheran Refugee | more...

October 3, 2012

Things You Should Know About FHA Refinance Loans: The Basic Details

By Joe Wallace

Refinancing an FHA mortgage is similar to refinance loan on other types of mortgages such as conventional loans or VA loans. Naturally the FHA has its own list of requirements and regulations that govern refinance loans; do you know the basics as well as you should? If you’re considering an application for an FHA refinance, here are a few general things you should know about going into the process. In the FHA loan rulebook under the section, “Purpose of a Refinance Transaction” we learn, ” A refinance transaction is used to pay off an existing real estate debt with the proceeds of a new mortgage; –for borrower(s) with legal title, and –on the same property”. The rules also state that an FHA borrower is “eligible to refinance the loan, as | more...

October 2, 2012

Is a Borrower Ever Automatically Ineligible for an FHA Home Loan?

By Joe Wallace

FHA home loans are designed to help eligible borrowers get into affordable mortgages. The general credit qualifying criteria and loan terms can be far more lenient than some conventional mortgages, and the FHA loan program has helped many who could not qualify for conventional loans because of large down payment requirements or other terms. But is there a time when a potential FHA loan applicant is automatically ineligible for an FHA mortgage? According to the FHA, the answer is yes. For the purposes of this blog post, we aren’t talking about those who have experienced a foreclosure or who have filed bankruptcy; after all, there is only a mandatory waiting period–the seasoning period–that must be waited out until such borrowers are eligible to apply again. They haven’t been forbidden from | more...

October 2, 2012

FHA Loans: Credit References

By Joe Wallace

It would be easy to assume that a borrower with little credit history, or non-traditional credit history, is not eligible for an FHA guaranteed mortgage. But this isn’t necessarily true–the FHA has a set of requirements for those with little credit history or non-traditional credit. In typical FHA loan cases, the borrower would submit credit card information, plus details on any student loans, car payments, rent, or other financial obligations. Borrowers who have alternative credit references can still apply and be considered for an FHA mortgage, thanks to a set of requirements for credit references that might be considered non-traditional. Borrowers should not give up on pursuing an FHA home loan just because they don’t have typical credit–as you’ll read below, there is much more that can be used on | more...

October 1, 2012

FHA Loan Restructuring: A Reader Question

By Joe Wallace

A reader asks, “Is there any program (modification), that can lower my payment, restructure a unfair loan, which I can qualify for considering I just got discharged from Chapter 7 so I can afford my other bills? I have been denied for modifications, through my lender, and denied on two time consuming demands from lenders before the bankruptcy. My mortgage takes most of my income.” FHA loan modifications must be done through the lender–no private third party is authorized to restructure another financial institution’s loan without its participation. However, there are home loan modification programs sponsored by the government, such as HAMP (the Home Affordable Modification Program) that work with a participating lender. HAMP is aimed only at certain types of home loans, though VA and FHA loan programs may | more...

September 27, 2012

FHA Issues Guidance To Lenders On Hazard Insurance Payments Following Hurricane Isaac

By Joe Wallace

The FHA has issued a reminder to lenders to “quickly release hazard insurance payments” to affected borrowers trying to recover from Hurricane Isaac. According to an FHA press release, HUDNo.12-156, the FHA wants to “reinforce its existing policy requiring lenders to release insurance payouts to homeowners eager to rebuild their damaged homes following disaster.” The release states, “In the past, the U.S. Department of Housing and Urban Development (HUD) noticed some lenders would instead use these insurance funds to pay off the outstanding mortgage balance, leaving many homeowners without the resources they need to rebuild their homes.” Carol Galante, FHA

September 26, 2012

FHA Loan Rules For Principal Residences

By Joe Wallace

A recent reader question about FHA loan requirements for occupancy begs the question; what does the FHA consider a “principal residence” or “primary residence” and will the FHA approve of a second FHA mortgage for those who purchase single-family, owner-occupied property? According to the FHA loan rules, found in HUD 4155.1, in the section titled “FHA-Insured Mortgages on Principal Residences and Investment Properties” you’ll find the following: “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.” If you want to buy a home, this means the FHA expects you to use it AS a home. Additionally, “FHA will not insure a mortgage if it is determined that the transaction was designed to use | more...

September 26, 2012

FHA Loan Rules: Occupancy Requirements

By Joe Wallace

A reader asks, “I purchased a home in 2006 with an FHA loan. At the time, I remember a stipulation that I was required to reside in the house, for three years (I believe), which I did.” “I have since moved and rented out the property, and just received a letter from my mortgage company that they had received word that my mailing address had changed, and that per the terms of my FHA loan, I was required to occupy the house until the mortgage was paid off, and that I may be facing tax penalties.” “They have asked me to sign a form verifying that I still occupy the house and will do so until the mortgage is paid in full. Are there any types of first time homeowners | more...

September 24, 2012

FHA Condo Project Approval Guidelines Change: Homeowners Association Rules

By Joe Wallace

We’ve reported many new changes to the FHA condo approval process that allows a condominium project to be considered for an FHA loan for individual units. Condo projects must be FHA approved before a borrower can apply for an FHA guaranteed mortgage on a unit in that condo project; that means a project’s compliance with FHA loan rules is very important. For example, a condo project may not be approved for an FHA mortgage loan if there are restrictions on the borrower’s ability to freely sell the property. The FHA has gone back and forth on an issue related to “the right of first refusal” which limits a borrower’s ability to sell. Condo loan applicants have reported problems with the right of first refusal clause, getting turned down for FHA | more...