Articles Tagged With: Home Equity Conversion Mortgages

May 6, 2013

FHA Loan Reader Questions: Do All Homes For Sale Require an Appraisal?

A reader asks, “Do all homes need an inspection and an appraisal? My sister-in-law is the seller and is worried (about an) older kitchen; FHA may not give me a loan. The home is in good condition and the family already did an appraisal in order to get an asking price.” There are two separate procedures asked about in this reader question–an appraisal is not the same thing as a home inspection, but both are important parts of the home buying process. A home inspection is a voluntary service the borrower can and definitely SHOULD budget for when purchasing a home with any kind of mortgage whether it is an FHA, conventional, VA loan, etc. The home inspection is a more up-close look at the condition of the property and | more...

March 6, 2013

FHA HECM Deadline Approaching

By Joe Wallace

Earlier this year, the FHA and HUD issued new guidelines regarding the FHA Home Equity Conversion Mortgage Loan program also known as HECM. Important changes are coming to this home loan program which is designed for those age 62 or older. According to FHA Mortgagee Letter 2013-01, the changes are effective for all HECM fixed-rate case numbers assigned on or after April 1, 2013. What are these changes and why are they occurring? According to the mortgagee letter, “To help sustain the HECM program as a viable financial resource for aging homeowners and to strengthen the Mutual Mortgage Insurance Fund, the HECM Saver will be the only initial MIP option available to mortgagors who seek the predictability of a fixed interest rate mortgage and lower upfront closing costs”. This means | more...

February 5, 2013

FHA Announces Changes To HECM Loan Program

By Joe Wallace

The FHA has issued a press release and Mortgagee Letter describing changes to the FHA Home Equity Conversion Mortgage (HECM) program. According to the FHA official site, the FHA will merge certain options associated with the HECM program and the FHA HECM Saver program as described below: “…FHA will consolidate its Standard Fixed-Rate Home Equity Conversion Mortgage (HECM) and Saver Fixed Rate HECM pricing options. This change will be effective for FHA case numbers assigned on or after April 1, 2013. The Fixed Rate Standard HECM pricing option currently represents a large majority of the loans insured through FHA’s HECM program and is responsible for placing significant stress on the MMI Fund.” The FHA press release adds, “To help sustain the program as a viable financial resource for aging homeowners, | more...

October 31, 2012

FHA Energy Efficient Mortgages: Is Escrow Required?

By Joe Wallace

When learning abo0ut FHA home loans, escrow is one issue some borrowers have questions about. The FHA frequently asked questions pages include the following about escrow, which is governed by something called the Real Estate Settlement Procedures Act or RESPA: “Does RESPA require borrowers to maintain an escrow account? NO. It is the lender’s decision whether the borrower must maintain an escrow account for the purpose of paying taxes and other items. The HUD regulations only limit the maximum amount that a lender can require a borrower to maintain in an account.” That Q&A from the FHA official site seems to indicate that the FHA does not require escrow; indeed, it is the lender’s choice to require escrow or not. But are there situations where an escrow account may actually | more...

October 17, 2012

FHA Warns About Home Equity Mortgage Loan Scams

By Joe Wallace

The FHA official site includes a page about reverse mortgages and Home Equity Conversion Mortgages. On that page, you’ll find a warning from the FHA and HUD about scam artists who take advantage of some loan applicants who don’t know enough about the FHA’s free information on HECM loans and reverse mortgage loans. “Reverse mortgages are becoming popular in America” the FHA site says, “Reverse mortgages are a special type of home loan that lets a homeowner convert the equity in his/her home into cash. They can give older Americans greater financial security to supplement social security, meet unexpected medical expenses, make home improvements, and more. If you are interested in a reverse mortgage, beware of scam artists that charge thousands of dollars for information that is free from HUD!” | more...

September 5, 2012

FHA Loans and Homeowner’s Association Policies

By Joe Wallace

A recent press release issued by the FHA/HUD announced charges against a Florida homeowner’s association for policies the press release claims are in violation of the Fair Housing Act. According to HUDNo.12-145, “The U.S. Department of Housing and Urban Development (HUD) announced…that it is charging a Gibsonton, FL, homeowners association and its Tampa-based former management company with violating the Fair Housing Act by subjecting a family to different rental terms and conditions because they have six children.” The charges allege, according to the press release, “that Townhomes of Kings LakeHomeowners Association (HOA), Inc., and Vanguard Management Group, Inc., violated the Fair Housing Act by telling the family that they had too many people living in their rental townhouse and threatening to evict them if they didn’t reduce the number of | more...

June 21, 2012

FHA Loan Rules For Employment and Income

By Joe Wallace

FHA home loans require the borrower to submit employment information to the lender for verification. This is done for several reasons to include documenting the borrower’s income, stability of that income, and how long that income has been ongoing. FHA Loan rules, as described in HUD 4155.1 Chapter Four, Section D, state the following about income and employment: “To be eligible for a mortgage, FHA does not require a minimum length of time that a borrower must have held a position of employment. However, the lender must verify the borrower

April 18, 2012

Prison Time For Reverse Mortgage Scammers

By Joe Wallace

From time to time, we report news of housing scams that can affect FHA borrowers. It’s a way of raising the awareness that such scams exist, a reminder of the necessity of being careful in the loan process. The latest news from the FHA and HUD includes a report of three loan officers and a title agent who have been barred from doing business with the FHA/HUD following their convictions on fraud charges. The action was announced in a press release at HUD.gov, HUDNo.12-069: “The U.S. Department of Housing and Urban Development (HUD) today announced the indefinite debarment of three South Florida mortgage loan officers and a Pittsburgh title agent following their criminal convictions on charges they defrauded elderly borrowers, mortgage lenders and the Federal Housing Administration (FHA). Marcos Echevarria, | more...

April 18, 2012

FHA Loan Reader Question: Refinancing Loans and UFMIP Decreases

By Joe Wallace

A reader asks,“I

March 1, 2012

Why Was I Rejected For An FHA Home Loan?

By Joe Wallace

We get many reader comments and questions about FHA insured home loans. Many of them involve the loan process, appraisal procedures and refinancing issues, but some people ask us why they were turned down for an FHA loan, or want to know about the rules concerning loan approval and denial. When an FHA home loan applicant is denied a loan, there are several things which must happen. Many borrowers rightly want to know the specific reasons they were turned down for a home loan and whether it’s possible to try again after addressing the concerns which led to having the FHA loan application denied. Did you know the lender is required to inform the borrower not only as to the reasons why the loan was turned down, but in some | more...