Articles Tagged With: Credit Requirements

May 15, 2012

FHA Loans: Rights and Responsibilities

According to the FHA and HUD, FHA loans come with certain rights and responsibilities. Some borrowers don’t realize they have these rights or know what the lender’s obligation to the borrower might be under FHA/HUD rules and the Real Estate Settlement Procedures Act (RESPA). Knowing makes for an informed borrower–someone empowered to take action in cases where the borrower feels something isn’t quite right. How well do you understand the following? The Lender’s Duty To Respond To Complaints According to the FHA official site, any borrower with problems with the servicing of a home loan is entitled to a response from the lender. In cases where you aren’t getting that response, the FHA urges you to “Write to your servicer and call it a ‘qualified written request under Section 6 | more...

May 11, 2012

FHA and HUD Announce $202 Million Settlement With Deutsche Bank and MortgageIT

By Joe Wallace

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

April 30, 2012

FHA Loans: How Can I Estimate My Monthly Mortgage Payment?

By Joe Wallace

One commonly asked question about FHA home loans involves the process of determining how much a borrower could pay on a monthly basis on the FHA guaranteed loan. For this purpose, the FHA official site refers potential borrowers to a loan calculator provided by GinnieMae.gov, which is designed to help borrowers get a general idea of what the costs might be per month based on user-provided details including the sale price of the home, the housing market that home is in, etc. Specifically, the loan calculator asks for the sale price of the property, the state and county where that property is, the term of the loan plus interest rate, and the amount of down payment. Once these fields are filled in, the GinnieMae.gov calculator returns the results with plenty | more...

April 13, 2012

Steps To An FHA 203(K) Fixer Upper Loan

By Joe Wallace

Some FHA loan applicants are interested in what the FHA calls “Handyman Specials” or “Fixer-Upper Loans” known as the FHA 203(K) mortgage. The FHA 203(K) is a loan guaranteed by the FHA, issued through a private lender for the purpose of buying and repairing property at the same time. There is a down payment requirement, which according to the FHA is “approximately 3.5%” of the purchase and repair costs. FHA 203(K) mortgages are available for those who intend to buy and occupy the property, but non-profit agencies and government entities can also apply. According to the FHA official site, there are a series of steps the borrower takes to apply for a 203(K) loan. First, the buyer finds a suitable property to purchase and repair. According to the FHA, both | more...

April 12, 2012

FHA Loan Credit Score Requirements

By Joe Wallace

The FHA recently published “The Facts on FHA” on the official blog of the Department of Housing and Urban Development. One of the highlights of that post included a list of actions FHA and HUD have taken since 2009–more steps “to eliminate unnecessary credit risk and assure strong premium revenue flows than any Administration in FHA history” according to acting Federal Housing Administration Commissioner and Assistant Secretary for Housing, Carol Galante. One of the changes made by the FHA in recent times is an update to the required combination of FICO score requirements and down payments. According to Galante, “New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score | more...

April 11, 2012

FHA Loan Reader Question: Septic Systems

By Joe Wallace

A reader asks, “I am looking to buy a home in the middle of a suburban neighborhood that is the only house in the area (that we know of) that is on septic. Everyone else is on city sewer.” “Now if the FHA comes out with an appraiser to inspect the home/property, will they require that the home be hooked up to city? Or will they inspect the septic systems to make sure it’s in proper working condition? And will it pass if it is? And will they allow it to stay on septic?” Questions like this have a two-part answer. Part one is that local building codes and ordinances have much to do with the FHA appraiser’s decision. The home must live up to local code in order to | more...

April 4, 2012

The State of The FHA Loan Program

By Joe Wallace

Carol Galante is Acting Federal Housing Administration (FHA) Commissioner and Assistant Secretary for Housing. In that capacity she recently wrote a blog post on the official FHA/HUD blog titled, “The Facts On FHA” which included her take on several myths currently in circulation about FHA loans, the health of the FHA program and other topics. Galante writes, “The health of the FHA and management of its business have been frequent topics of discussion in the media and among our stakeholders in recent months.

April 3, 2012

FHA Mortgage Insurance Premiums

By Joe Wallace

Yesterday, we answered a reader question about FHA loan Mortgage Insurance Premiums. We were asked, “I thought that it was announced recently that FHA insurance premiums were being decreased, not increased?

March 30, 2012

FHA Loans and Credit Reports

By Joe Wallace

One frequently asked question about FHA home loans involves the credit check. Many borrowers want to know what credit score the lender is looking for, (many lenders require a minimum score of 620) but many more also want to know what kind of credit reporting data the loan officer needs to approve or deny an FHA home loan application. There are many areas the lender must review as part of the FHA loan application. A typical credit check includes a review of all credit inquiries over the last three months–one reason why many lending experts recommend not applying for new credit cards or other lines of credit before or during a home loan application. The lender must also review credit information from the last seven years of the applicant’s credit | more...

March 23, 2012

Streamline Your FHA Mortgage

By Joe Wallace

According to the FHA official site, streamline refinancing for FHA home loans has been offered since the 1980s. While “streamline refinancing” refers to the amount of paperwork involved with processing the new home loan, it is not meant to imply there are no costs involved with the refinancing loan. FHA streamline refinancing loans for borrowers with existing FHA mortgages must result in either a lower interest rate, a lower monthly payment, or both. Exceptions are made when the borrower is refinancing into an FHA streamline mortgage from an Adjustable Rate Mortgage, also known as an ARM loan. Unlike FHA cash-out refinancing, no money is permitted to go to the borrower as part of the streamline loan. That means no “debt consolidation” or other purposes are permitted with FHA streamline loans–these | more...