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Articles Tagged With: Fair Housing Act

June 13, 2012

FHA Loan Reader Questions: Can I Buy Another Home With An FHA Mortgage Loan?

By Joe Wallace

A reader asks, “We purchased our first home using an FHA loan – 5% down. We have outgrown our home due to an expanded family and we are looking to purchase another home that is bigger – is it possible to qualify for another FHA loan – we have at most 10% to put down towards a new home. Our plan would be to rent out this current home we have as it is in a good rental area. Any advice on how we can achieve this?” FHA loan rules, according to the official site at FHA.gov, include a restriction on issuing single-family mortgage loans to investors. Due to this restriction, the official site says, “FHA generally will not insure more than one mortgage for any borrower (transactions in which | more...

 

June 12, 2012

Bank Of America Settles Maternity Discrimination Claim

By Joe Wallace

A recent press release found at the official site for FHA/HUD announces, “Bank fund will compensate women denied loans because they were pregnant or on maternity leave”. According to the HUD press release 12-095, “The U.S. Department of Housing and Urban Development (HUD) announced today that Bank of America has agreed to pay up to $161,180 to settle allegations that one of the bank’s San Jose, California branches refused to refinance the mortgage of an Irvine woman because she was on maternity leave. HUD reached the agreement with Bank of America to resolve a Fair Housing Act complaint that had been filed by the Fair Housing Council of Orange County (FHCOC).” Those applying for any kind of home loan–including FHA guaranteed mortgages–may not be discriminated against due to pregnancy, family | more...

 

June 8, 2012

FHA Loans: Settlement Fees Required to Close The Deal

By Joe Wallace

FHA loan rules include guidelines on the settlement fees required to close the loan so the buyer can take possession of the property. For example, FHA loan rules state, “Lenders may charge and collect from borrowers those customary and reasonable costs necessary to close the mortgage loan”, but the very next line in those rules add, “Borrowers may not pay a tax service fee.” Borrowers who want to know the fees they are required to pay should take note; FHA loan rules say the lender is required to include “the sum of all fees and charges from origination-related charges in Box 1 on page 2 of the Good Faith Estimate (GFE).” What can those fees include? According to HUD 4155.1 Chapter 5 Section A “In addition to the minimum downpayment | more...

 

June 7, 2012

FHA Loans: Can Non-Taxable Income Be Used To Qualify For an FHA Home Loan?

By Joe Wallace

FHA loan rules require the lender to verify income sources listed on an FHA home loan application. Only income that the lender deems stable, reliable, and likely to continue can be used to qualify for the loan. Because of this, the FHA loan program has rules covering different types of income and what may or may not be used to qualify for the loan. Income that does qualify is used to calculate the borrower’s debt-to-income ratio–a critical part of the loan approval process. Too much debt and not enough income, and a borrower could face being rejected for the FHA mortgage. One area some borrowers have concerns with is the income from non-taxable sources such as Social Security payments, military allowances, government benefits and other sources. These income sources, when | more...

 

May 29, 2012

FHA Loan Reader Questions: Unsettled Credit Report Details

By Joe Wallace

A reader asks, “There are two old debts from 2003 that I have not been able to verify on my credit report. The total of this is $520, the underwriter on the mortgage has been relentless about this debt. I will not pay for something that do not know what it is for. Does this affect my FHA loan?” Reader questions like these come in quite often. Some of them seem to be asking whether the FHA has a rule that gets around a lender’s insistence on a specific issue connected with the FHA loan; a requirement such as a minimum waiting period following a bankruptcy proceeding or the example cited in the reader’s question here. Do FHA loan rules trump the financial institution’s policies in such cases? Can the | more...

 
FHA Home Loan Basics

May 23, 2012

More on FHA Loan Pre-Purchase Counseling

By Joe Wallace

Recently we reported on a study conducted by FHA/HUD that examined the effects of pre-purchase counseling for house hunters. According to a May press release, HUD No. 12-085, the Pre-Purchase Counseling Outcome Study, “enrolled 573 individuals seeking pre-purchase counseling services in fall 2009 from 15 HUD-funded counseling agencies across the country.” “The objectives of the study were to examine the characteristics of pre-purchase counseling clients, the types of services they received, and whether and under what circumstances they purchased housing in the 18 months after starting counseling.” The results of this study have been published by the FHA and HUD, and for those on the fence about whether or not to take advantage of such counseling services, the data is quite convincing. Potential FHA borrowers who find themselves in the | more...

 

May 18, 2012

HUD Studies Reveal Important Benefits Associated With Housing Counseling

By Joe Wallace

A press release from the Department of Housing and Urban Development says FHA/HUD approved housing counseling offers significant benefits “for families who purchase their first homes and those struggling to prevent foreclosure”. Those benefits were the focus of two HUD research projects. According to HUDNo.12-085, ” HUD found housing counseling significantly improved the likelihood homeowners remained in their homes” . That finding comes from two housing counseling research projects, one that involved pre-purchase counseling and one focusing on foreclosure avoidance counseling by HUD-approved agencies. “Both the pre-purchase counseling and foreclosure counseling studies enrolled clients in the fall of 2009 and early 2010. HUD found that 35 percent of participants became homeowners within 18 months of pre-purchase counseling and only one of those buyers subsequently fell behind in their mortgage payments.” | more...

 

May 16, 2012

FHA Loan Reader Questions: Loan Approval For Self Employed Borrowers

By Joe Wallace

A reader asks, “Is it true that FHA will not approve a loan if you have only been self-employed at your current business for 1 1/2 years? Applied for an FHA loan, was self-employed in a retail business for 5 years, sold my interest in the business and opened another retail business. My newest business has been open 1 1/2 years. Can I still get financed (credit score and debt to income ratio is excellent)?” The FHA loan rules are clear about minimum employment times in general–there are no minimum requirements for the amount of time spent on any one job. According to HUD 4155.1, Chapter , Section D; “To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held | more...