Articles Tagged With: Fair Housing Act

October 8, 2013

Minimum Down Payments for FHA Loans: A Reader Question

A reader asks, “Chapter 7 bankruptcy discharged in Oct 2010. Credit score now around 670. The hardest thing I am finding is the ability to save for a down payment. What would be a minimum down payment that I would be required to have before I could get an FHA loan? Thanks.” Unlike VA mortgage loans, FHA home loans feature a minimum down payment, also known as a minimum cash investment. The down payment must not only be a certain percentage of the loan amount, but it is also required to come from approved sources that can be verified. Borrowers cannot, for example, take out a cash advance on a credit card or any other form of unsecured loan for the down payment. FHA loan rules describe the minimum down | more...

October 4, 2013

HUD Announces Settlement in Maternity Leave Discrimination Case

By Joe Wallace

The FHA/HUD official site has a recent press release announcing a settlement in a maternity leave discrimination case brought against a Wisconsin-based mortgage insurance company. According to HUDNo.13-149, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached agreements to settle two Fair Housing Act complaints against Madison, WI-based CMG Mortgage Insurance Company (CMG MI), the nation’s largest provider of private mortgage insurance to credit unions.” That company has agreed to pay $30,000, “resolving allegations that it refused to insure the home mortgage loan of a married couple because the wife was on maternity leave, and that it maintained a written policy of refusing to consider the regular pay of women on maternity leave as income.” As the press release points out, federal law prohibits discrimination in | more...

October 2, 2013

Bad Credit FHA Loans? A Reader Question

By Joe Wallace

We get a lot of questions about FHA loans and bad credit. One of the latest examples comes from a reader who asks; “I am wanting to buy me a single family home but my credit is messed up. I know my score is bad! I am a single mother with 4 kids and I want my own house. I am in need of help on which way to go. Do I need to file chapter 13 or 7 or is there a way to get my credit fixed so that I can make another one of my dreams come true? Help me please.” While we cannot advise or answer questions on issues that fall outside how FHA loans work and their related issues (appraisals, Private Mortgage Insurance, etc.) | more...

September 26, 2013

FHA Loan Rules on Special Forbearance

By Joe Wallace

The FHA recently updated its rules associated with foreclosure avoidance and loss mitigation on FHA mortgages; borrowers who get into financial difficulty and may have trouble paying their FHA insured home loans should contact their loan officer immediately to discuss options for avoiding foreclosure. The newly updated FHA loan rules in this area include something known as Special Forbearance. Special Forbearance is described by the FHA as, “a written agreement between a mortgagee and mortgagor to reduce and/or suspend mortgage payments.” According to the most recent guidance from the FHA, “A Special Forbearance is available only to mortgagors who are unemployed. Special Forbearance agreements must provide for a minimum of 12 months for re-employment and require subsequent evaluation for a more permanent Loss Mitigation option to cure the default.” This | more...

September 19, 2013

FHA Home Loan Debt To Income Ratio Rules: A Reader Question

By Joe Wallace

A reader asks, “I have significant student loans, but my parents make all payments on the loans because they had promised to provide my education as a gift (this was a commitment they made before I made the decision to pursue my education).” “They have made timely payments for three years, and they intend to continue to make payments until the loans are paid off. Can they guarantee future payments so that I can remove the loans from my debt-to-income ratio?” There are two basic factors at work when the lender is reviewing a borrower’s debt-to-income ratio. One is the borrower’s current debt load compared to the amount of income coming in. The other is how the new FHA loan payment would affect that debt load. Since the debts in | more...

September 18, 2013

FHA and HUD Announce Assistance for Colorado Storm Victims

By Joe Wallace

The FHA and HUD have issued a press release announcing help for victims of recent storms and flooding in Colorado. According to HUDNo.13-142, foreclosure relief, FHA home loans for disaster victims, and other forms of assistance are now available to those in Adams, Boulder, Larimer and Weld Counties. The press release says, “U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to the State of Colorado and provide support to homeowners and low-income renters forced from their homes due to severe storms, flooding, landslides and mudslides.” This type of assistance generally comes after the affected area has been declared a disaster zone by the president. “Families who may have been forced from their homes need to know that help is available to begin | more...

September 16, 2013

FHA Loan Credit Questions–What Affects Your Chances Besides FICO Scores?

By Joe Wallace

A reader asks a question about FHA credit requirements, and starts out by quoting one of our past replies to a reader question about FHA credit rules. Here’s the quote: “FICO scores are not the only issue examined on a credit application. To infer that simply by raising FICO scores for the loan application in question, the loan might be approved with the minimum down payment in this case would be misleading–there are many factors that affect your credit worthiness in the eyes of a lender, FICO scores are just one of those factors…..” The reader asks, “Which factors exactly affect one’s creditworthiness in the eyes of a lender besides FICO scores?” There are many factors that could affect a lender’s view of an individual borrower’s creditworthiness. Some are known | more...

September 11, 2013

FHA Loan Rules Updated: Maximum Loan Amounts For Streamline Refinancing

By Joe Wallace

The FHA and HUD have updated some of the rules used to calculate maximum mortgage loan amounts for FHA Streamline Refinancing loans. According to Mortgagee Letter 2013-29, there are new guidelines to lenders on how the maximum amount is calculated, and what can be included in the loan amount when calculating the mortgage amount. “Mortgagees are reminded that when processing an FHA-insured streamline refinance mortgage, the new maximum mortgage amount must always be calculated starting with the outstanding principal balance on the existing mortgage, not with the payoff amount for the existing mortgage.” Borrowers should know the difference between the outstanding balance and the payoff amount. According to the Consumer Financial Protection Bureau (CFPB) official site, “Your payoff amount is how much you will actually have to pay to satisfy | more...

September 9, 2013

FHA Loans, Late Student Loan Payments, and Home Loan Approval: A Reader Question

By Joe Wallace

A reader asks, “My wife and I are trying to get a FHA loan. Me as the primary borrower and her as co-applicant. She has lates on her student loans, which have been consolidated and are current for the last 8 months. we provided the lender a letter of explanation, detailing the reason she was late…underwriter has made a decision to deny, stating the reason was/is not good enough. Is there anything we can do?” There are two important things a borrower should consider when applying for an FHA mortgage in circumstances like these. The first is that not all lenders have the same standards. The financial institution that turns you down today may have more strict requirements than the one that offers you an FHA mortgage tomorrow. It’s very | more...

September 3, 2013

Qualifying For an FHA Loan, “Minimum Income”, and Your Monthly Debt

By Joe Wallace

One common misconception about FHA home loans is that there’s a set, minimum income amount a borrower must have in order to qualify for the home loan. This is not true. The FHA does not set minimum income requirements or have rules about how much a borrower can make before he or she is no longer eligible to apply for an FHA mortgage. In short, the actual dollar amount of your income doesn’t matter. What does is whether you can afford the loan based on the amount of debt you have versus the amount of money you bring in every month. Your lender is required to calculate your debt to income ratio to make sure you can afford the FHA loan along with all your other financial obligations. Here’s an | more...