Articles Tagged With: FHA Foreclosure

October 29, 2012

Hurricane Sandy and FHA Advice on Natural Disasters and FHA Loans

Hurricane Sandy has been dominating the headlines; it’s a good time to review FHA loan policy for those who might be affected by a natural disaster such as a hurricane, flood or other weather-related issue. Much of the FHA loan policies are directed towards those who have had properties damaged by a disaster, but some borrowers have employment issues after a weather-related incident and may have difficulties making their next FHA loan payment. FHA loan rules do address that situation as well as cases where the borrower is trying to recover from storm damage or other problems. From the FHA official site: “Was your home or your ability to make your mortgage payments harmed by an event that the President declared a disaster? You may qualify for relief to help | more...

October 25, 2012

FHA Loan Reader Question: What Does “Endorsed” Mean?

By Joe Wallace

A reader asks, “Can you please explain what “endorsed” means? I started my FHA streamline refi process March 11, 2009 through Countrywide. In the meantime BoA purchased Countrywide and the refi wasn’t finalized until June 29, 2009. Its not my fault the process took so long, and I sincerely hope I am not losing out on a refi or decrease PMI because of their delays!” This reader question most likely refers to FHA mortgagee letter HUDNo.12-045, which includes the following information about FHA Streamline Refinancing: “…Acting Federal Housing (FHA) Commissioner Carol Galante announced significant price cuts to FHA

October 11, 2012

FHA Loan Reader Question: Title I Loans For Remodeling/Rehab

By Joe Wallace

A reader asks, “I am interested in borrowing a small amt. of money for remodeling my home. Is there any way I can qualify for an FHA loan for this purpose? I have never had bankruptcy, never missed a payment, never defaulted on any loan…” Something called a Title I Home Improvement loans are described on HUD.gov as a way to do just what this reader question describes. According to the official site on the page titled “About Title I Home Improvement Loans” you’ll find the following description: “HUD insures private lenders against loss on property improvement loans they make. The applicant must have a good credit history and the ability to repay the loan in regular monthly payments. Both large and small improvements can be financed. Search HUD’s list | more...

October 9, 2012

FHA Loan Reader Question: Why Couldn’t I Qualify For an FHA Loan?

By Joe Wallace

A reader asks, “I have really been working on my credit to be able to purchase a home. My scores are 618 – 595 – 540. I paid my student loan off in full. I went and got a unsecured credit card to help boost my scores…when people check your credit the numbers roll back…I have an auto loan for just over a year that is in good standing.” “I also paid off 2 vehicles and have been at my job now for just over 16yrs….Why, Why, Why couldn’t I qualify for this loan?” There are a number of reasons why a borrower might not be approved for an FHA mortgage, but in this reader’s case the FICO score could be one of those reasons. Why? According to FHA loan | more...

October 3, 2012

Things You Should Know About FHA Refinance Loans: The Basic Details

By Joe Wallace

Refinancing an FHA mortgage is similar to refinance loan on other types of mortgages such as conventional loans or VA loans. Naturally the FHA has its own list of requirements and regulations that govern refinance loans; do you know the basics as well as you should? If you’re considering an application for an FHA refinance, here are a few general things you should know about going into the process. In the FHA loan rulebook under the section, “Purpose of a Refinance Transaction” we learn, ” A refinance transaction is used to pay off an existing real estate debt with the proceeds of a new mortgage; –for borrower(s) with legal title, and –on the same property”. The rules also state that an FHA borrower is “eligible to refinance the loan, as | more...

September 28, 2012

Foreclosure Avoidance Counsleing on FHA Home Loans: Should I Pay For Assistance?

By Joe Wallace

Aside from getting the FHA home loan itself, one of the most important benefits to having an FHA mortgage is the availability of free foreclosure avoidance counseling for home owners who need it. FHA.gov reminds borrowers that it is not necessary to pay fees to third-party foreclosure avoidance agencies. Plenty of free counseling and assistance is available from the FHA and HUD. On the FHA official site, under the page titled “Consumer Fees For Housing Counseling” you’ll find the following: “Foreclosure prevention counseling and homeless counseling services are available free of charge through HUD’s Housing Counseling Program. Housing Counseling agencies participating in HUD’s Housing Counseling Program are not permitted to charge consumers for these specific housing counseling services. (Emphasis ours.) Counseling recipients should not pay for these services.” That’s not | more...

September 26, 2012

FHA Loan Rules For Principal Residences

By Joe Wallace

A recent reader question about FHA loan requirements for occupancy begs the question; what does the FHA consider a “principal residence” or “primary residence” and will the FHA approve of a second FHA mortgage for those who purchase single-family, owner-occupied property? According to the FHA loan rules, found in HUD 4155.1, in the section titled “FHA-Insured Mortgages on Principal Residences and Investment Properties” you’ll find the following: “To prevent circumvention of the restrictions on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any borrower.” If you want to buy a home, this means the FHA expects you to use it AS a home. Additionally, “FHA will not insure a mortgage if it is determined that the transaction was designed to use | more...

September 26, 2012

FHA Loan Rules: Occupancy Requirements

By Joe Wallace

A reader asks, “I purchased a home in 2006 with an FHA loan. At the time, I remember a stipulation that I was required to reside in the house, for three years (I believe), which I did.” “I have since moved and rented out the property, and just received a letter from my mortgage company that they had received word that my mailing address had changed, and that per the terms of my FHA loan, I was required to occupy the house until the mortgage was paid off, and that I may be facing tax penalties.” “They have asked me to sign a form verifying that I still occupy the house and will do so until the mortgage is paid in full. Are there any types of first time homeowners | more...

September 20, 2012

FHA Loans After Foreclosure: A Reader Question

By Joe Wallace

A reader asks, “I filed for bankruptcy over 3 years ago. My home was included because I did not sign a reaffirmation agreement. However the bank did not require me to move out because I was not in arrears with the mortgage and never missed a payment.” “About 18 months ago I was forced to move to be closer to my job due to vision problems. My doctor told me to not drive. I had to move out of the blue and the bank foreclosed a year ago. I was told that foreclosures was necessary to get my name off property but I was not legally responsible for the debt due to bankruptcy. Will the foreclosures prevent me from qualifying for an FHA home loan?” This is a complex situation | more...

September 11, 2012

FHA Loan Reader Questions: Foreclosure Seasoning Periods

By Joe Wallace

A reader asks, “Apparently 2 years ago a home that we sold out-right and even received cash back had a foreclosure initiated. We are in the process of trying to buy a home at this time. Our credit report looks great score of 650 to 720. We were told we were pre-approved. the day before we were suppose to close we got a call saying we were denied because there was an embedded code the underwriter found stating that a foreclosure had been initiated.” “We were told that according to FHA guidelines, you must wait 3 years after a foreclosure. Is this true? Although it didn