Articles Tagged With: FHA Counseling

October 3, 2013

FHA Loan Interest Rate Locks

In recent weeks, we’ve seen a steady drop in mortgage loan interest rates, with VA and FHA mortgage loan rates going as low as 4.0% in some cases (though that rate is not available from every lender or to every borrower). FHA mortgage loan rates tend to be lower than conventional loan rates in terms of the “ideal rate” for well qualified borrowers with very good FICO scores and credit repayment history. But even for borrowers who don’t have spotless credit, the recent mortgage loan rate recovery has offered some applicants a better deal than they could have gotten a few months ago when interest rates were climbing steadily over a period of weeks. One question some borrowers have about period like these when rates are higher in some months | more...

October 3, 2013

FHA Commissioner Addresses Confusion Over FHA Loans During Government Shutdown

By Joe Wallace

FHA Commissioner Carol Galante issued a statement clarifying some confusion over the FHA’s ability to process new single-family FHA home loan applications during the government shutdown. According to a variety of sources including CNN.com and American Banker, earlier reports from the FHA mistakenly announced the agency would not issue new loans if the government shut down. Galante issued a statement to clear up the issue, saying, “The HUD Contingency plan posted on Friday mistakenly included incorrect information about a potential shutdown’s impact on the FHA single-family loan program,” HUD said in a statement. “FHA will be able to endorse single family loans during the shutdown. A limited number of FHA staff will be available to underwrite and approve new loans.” The original shutdown plan had mistakenly announced, “FHA will be | 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 30, 2013

FHA Loan Modification Trial Payment Plans-What If The Borrower Fails?

By Joe Wallace

Recently the FHA changed some of its policies related to loss mitigation and foreclosure avoidance on FHA guaranteed home loans. In our last look at these changes, we examine what the latest guidance from the FHA and HUD has to say about borrowers in financial difficulty who cannot or do not successfully navigate a Trial Payment Plan. Borrowers and lenders are advised in Mortgagee Letter 13-32, “If a mortgagor fails to successfully complete a Trial Payment Plan under a Loan Modification or FHA-HAMP, pursuant to 24 C.F.R. § 203.355, mortgagees must still re-evaluate the mortgagor’s eligibility for other appropriate Loss Mitigation Options. If the mortgagor’s circumstances have not changed, the mortgagee must evaluate the mortgagor for FHA Loss Mitigation Home Disposition Options prior to initiating foreclosure.” While the Trial Payment | more...

September 27, 2013

FHA Loans, Credit Scores, and Your Repayment History

By Joe Wallace

One common type of question we’ve been asked as of late has to do with a borrower’s chances at getting an FHA loan approved in spite of bad credit, past financial difficulty, or a combination of both. There are many important things to understand about credit, but one of the most important for any borrower interested in an FHA should know about? The FHA’s attitude towards on-time bill payment, past financial difficulty, and related issues. The FHA loan rulebook, HUD 4155.1 says in Chapter Four, Section C, “Past credit performance is the most useful guide to • determining a borrower’s attitude toward credit obligations, and • predicting a borrower’s future actions.” That’s a basic general guideline, as is the next line from Chapter Four. “Borrowers who have made payments on | 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 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 10, 2013

HUD Announces Changes To FHA Home Equity Conversion Mortgage Program

By Joe Wallace

The FHA and HUD have announced changes to the FHA Home Equity Conversion Mortgage program designed to manage risks and make the program more secure. According to a press release issued recently, the new rules will, “manage risk associated with the Federal Housing Administration’s (FHA) reverse mortgage or Home Equity Conversion Mortgage (HECM) Program. This is part of the Department’s continuing effort to reform, strengthen and protect FHA’s Mutual Mortgage Insurance (MMI) Fund” “The changes being announced today will realign the HECM program with its original intent which will aid in the restoration of the MMI fund and help ensure the continued availability of this important program,” said Federal Housing Commissioner Carol Galante. “Our goal here is to make certain our reverse mortgage program is a financially sustainable option for | 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...

August 28, 2013

FHA Loan Reader Questions: The Nature of FHA Loans

By Joe Wallace

A reader asks, “I am currently buying a home on a land contract and was hoping maybe I could get it run through FHA the pay off is I think around 19,000.00 it is a trailer with a garage on it. My credit isn’t good enough to run it through the bank. I’m hoping you can help me. I have been paying on it for about 4 & 1/2 years. Please if you can help me I would appreciate it. I live off SSI because I became disabled in 1995, and have been drawing my SSI since 1996. Thank you for your time and consideration.” This reader question is a good reminder that there are still plenty of myths floating around out there about FHA mortgages and the nature of | more...