Articles Tagged With: Fair Housing Act

January 3, 2013

FHA Case Number Cancellation: A Reader Question

A reader asks, “Is it possible for the previous lender to cancel the FHA Case Number?” There is a bit of detail missing from this question that makes it a bit difficult to answer properly–is the reader asking whether a lender may cancel an FHA case number (or should) when the loan is transferred from one bank to another? Is the question simply asking whether it’s possible to cancel an FHA case number as opposed to letting it expire? Assuming this question involves a borrower who tried one lender, but decided to go with another, what do the FHA and HUD have to say about FHA case number cancellation? The rules are clear–lenders do not cancel FHA case numbers in these cases, they are expected to cooperate in the transfer | more...

December 31, 2012

FHA Streamline Refinance Loans: Lower Interest and/or Mortgage Payments

By Joe Wallace

With interest rates at lows not seen in many years, many FHA borrowers are considering refinancing their existing FHA home loan even if they have previously refinanced in the last few years. While some consider the term “serial refinancing” to be negative, this practice is in vogue once more as many rush to get better interest rates than they had access to when they first applied for a mortgage loan. Refinancing is especially popular at present due to concerns over the “fiscal cliff” and its potential to affect the average person’s bottom line through higher income taxes, the possible reduction or elimination of certain tax breaks including the mortgage interest deduction. Is now the right time to pre-qualify for an FHA refinance loan or apply for FHA streamline refinancing? That’s | more...

December 26, 2012

FHA Loan Rules For Loan Documents

By Joe Wallace

If you are new to the house hunting process, there are some guidelines you should know that directly affect your search for a home to buy with an FHA guaranteed mortgage. Some of these guidelines are in place for your protection, some have been created to prevent tampering with the loan approval process–or the appearance of such tampering. For example: one common bit of “legal advice” you can get from any reputable source on contracts and credit agreements includes the warning never to sign a contract with blank spaces or agreements that seem to be incomplete. This is sound advice–what is to prevent one party or the other from filling in those blank spaces later with terms that are favorable only to that person or persons? The FHA takes the | more...

December 24, 2012

FHA Revises Flood Zone Determination Policy

By Joe Wallace

The FHA and HUD have issued revised and updated guidance for borrowers and lenders regarding its flood zone determination policy. On December 11, 2012, the FHA official site was updated to include Mortgagee Letter 2012-28, which is intended to overrule a previous Mortgagee Letter issued in 2010 on the subject. At one time, those applying for FHA loans were not affected by a mandatory flood zone determination policy. In the past lenders were “strongly encouraged” to get a flood zone determination for home purchased with an FHA insured mortgage. That policy was revised, and is now updated and re-stated in FHA Mortgagee Letter 2012-28. According to the new mortgagee letter, “FHA requires all mortgagees obtain a flood zone determination on all properties. The documentation provided to evidence the flood zone | more...

December 21, 2012

Can A House Seller’s Appliances Reduce The Amount of My FHA Loan?

By Joe Wallace

When you want to buy a home with an FHA loan, unless you’re having a house built to spec, chances are good that appliances like a washer/dryer, stove, refrigerator and other items could be included in the purchase. In some cases this is not a problem, but depending on what the buyer and seller agree will “come with the house” as part of the purchase, could such items reduce the amount of your FHA loan? There’s an FHA loan rule about something known as an “inducement to purchase”. A seller is permitted to make a contribution to some financial aspects of the FHA loan (but not the down payment) in order to make the deal more attractive. Those contributions are limited as part of “the six percent rule”. According to | more...

December 19, 2012

FHA Loans, Scams, and Standard Procedures

By Joe Wallace

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 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 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...

November 26, 2012

FHA/HUD Announce Foreclosure Protection For Delaware Storm Victims

By Joe Wallace

A recent press release issued by the FHA and HUD announces foreclosure protection and other relief for victims of storms in Delaware. According to HUDNo.12-173A, victims of Hurricane Sandy have more options now that three affected counties have been designated federal disaster areas. According to the press release, “President Obama issued a disaster declaration for Kent, New Castle and Sussex Counties. The President’s declaration allows HUD to offer foreclosure relief and other assistance to certain families living in these counties.” According to U.S. Housing and Urban Development Secretary Shaun Donovan, “Families who may have been forced from their homes need to know that help is available to begin the rebuilding process,” said Donovan. “Whether it’s foreclosure relief for families with FHA-insured loans or helping these counties to recover, HUD stands | more...