Articles Tagged With: Credit Requirements

March 11, 2011

FHA Advice: Don’t Pay For Foreclosure Avoidance Counseling

There are many ads on television by private companies offering debt counseling services. But when it comes specifically to foreclosure avoidance, did you know you do not have to pay for counseling services? According to the FHA official site, “Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks

March 10, 2011

More on How the FHA Protects Borrowers From Loan Fraud

By Joe Wallace

In our last blog post, we discussed how the FHA protects borrowers from loan fraud. FHA regulations and requirements are designed to protect both borrower and lender.

March 10, 2011

How Does the FHA Protect Borrowers From Loan Fraud?

By Bruce Reichstein

The FHA issues warnings to consumers about predatory lending, but many people don’t know what predatory lending practices are until there’s a string of headlines about one specific type of activity. Protecting yourself against fraud and unethical practices in the real estate business is much easier when you know what to look for. It’s not that the real estate business is rife with dirty tricks–it likely suffers from the same amount of fraud as any other major industry–but the stakes are obviously much higher when it comes to buying a home. That’s why the FHA has requirements in place to protect the borrower. Look at the types of fraud sometimes found in the marketplace and compare the FHA rules to those governing other types of loans and you’ll see a | more...

March 8, 2011

FHA Loans, Predatory Lending, and Borrower Protection

By Bruce Reichstein

FHA loans are not immune from the attentions of con artists, scammers and fraudsters. The FHA does actively investigate claims of fraud, discrimination or abuse of the FHA loan system, but the borrower is sometimes the first line of defense when it comes to avoiding scams or predatory business practices. New FHA loan applicants are often the most vulnerable because they’re in the process of learning how FHA loans work. Scammers are aware of this and try to use it to their advantage. That’s one reason why the FHA encourages borrowers to attend home ownership education classes and credit counseling courses offered by HUD approved non-profit agencies. The information a new borrower learns in these classes helps first-time home buyers understand their rights, responsibilities, and the rules of FHA mortgages. | more...

March 7, 2011

FHA Appraisal Fee Facts

By Joe Wallace

The FHA loan process includes an appraisal of the property to be purchased. This appraisal is performed by an FHA approved professional and the loan cannot move forward without it. The appraisal is a critical part of the process for two reasons–it establishes that the property meets the FHA minimum property requirements and establishes a fair market value for the property. Once the fair market value is known, the FHA loan amount can be approved, provided the borrower has meet all FHA requirements for creditworthiness and other factors. FHA Appraisal Fact–The Borrower Pays For The Appraisal The FHA allows the lender to charge the borrower for the FHA appraisal. This is a standard part of the loan process. There are many reasons why this cost must be handled by the | more...

March 3, 2011

Should I Pay For FHA Loan Counseling?

By Joe Wallace

If you have an FHA loan and are trying to avoid foreclosure, the FHA recommends contacting the agency to be put in touch with a counselor that can help. The same goes for first-time home buyers; the FHA can put newcomers to the FHA insured mortgage loan process in touch with a local counselor who will guide them through credit prep, the loan process itself and what to do once a suitable home is found. There is even counseling help available for seniors, and for people facing homelessness. The FHA advertises these services on its official site, saying “Want advice on buying a home, renting, default, foreclosure avoidance, credit issues or reverse mortgages? HUD sponsors housing counseling agencies…search online for a

March 2, 2011

What Is an FHA 203(h) Mortgage?

By Joe Wallace

The FHA has a wide variety of home loan products, but it’s easy to assume that an FHA loan is just for people searching for their first home, trying to refinance, or looking to purchase another home after having sold their previous one. Did you know the FHA also provides home loans for victims of major disasters? An FHA mortgage program called Section 203(h) allows qualified lenders to offer FHA loans to those who lost their property in a major disaster and are in the process of buying a new home or rebuilding the old one. To qualify for this loan, FHA borrowers must meet credit and eligibility requirements typical for any FHA loan program but there are additional qualifiers. According to the FHA, “Individuals are eligible for this program | more...

March 1, 2011

Changes to FHA Cash Out Refinancing Requirements

By Bruce Reichstein

Many changes to FHA refinancing programs were announced in FHA Mortgagee Letter 2011-11, including alterations to the rules for FHA cash-out refinancing loans. FHA mortgagee letters, which are intended for approved borrowers and FHA lenders alike, routinely update rules and regulations when changes are made–these announcements are an important resource for FHA borrowers and it’s definitely a good idea to keep up with them if you’re interested in getting a new FHA loan or refinancing an existing one. In previous blog posts, we’ve discussed the changes FHA Mortgagee Letter 2011-11 announced as “effective immediately”, including an important clarification on the requirement for borrowers to be current on their FHA mortgages when applying for any kind of FHA refinancing. According to the FHA, “Mortgagors must be current on the mortgage being

February 28, 2011

Where Do I Go for an FHA Insured Home Loan?

By Joe Wallace

First time home buyers often don't know where to start when it comes time to find that first home. Locating properties for sale isn't challenging--there are plenty of for sale signs in or near practically every neighborhood and even more to browse in the local papers and online real estate listings. But finding the home is only part of the challenge. Where does a buyer find a suitable lender? A buyer who wants an FHA home loan might not know where to start looking to find a lender. Conventional borrowers have it easier--any suitable bank with the right terms will do.

February 25, 2011

FHA Streamline Refinancing Rules

By Joe Wallace

There have been several changes to the rules affecting FHA refinancing loans. Subordinate liens, the waiting period borrowers must go through before applying for an FHA refinancing loan, and other important areas have all been affected by new rules designed to protect the FHA loan program and tighten control in certain areas of the refinancing process. For example, borrowers are now required to be current on their mortgage the month prior to and for the month of the closing date.