Articles Tagged With: FHA Loan News

October 9, 2014

HUD Settles “Redlining” Discrimination Complaint

Have you ever wanted to apply for an FHA home loan only to experience what may be illegal discrimination forbidden by the Fair Housing Act? In some cases the discrimination may not even reach the borrowers themselves, as evidenced by a recent settlement announced by the HUD official site. According to a October 2014 press release issued on the FHA/HUD official site, “The Department of Housing and Urban Development (HUD) announced today that it has negotiated a Conciliation Agreement with Illinois-based Midland States Bancorp, resolving allegations that the bank avoided doing business in predominantly African American and Hispanic neighborhoods in St. Louis, Missouri and northern Illinois.” Federal Fair Housing Act laws state that it is illegal to, “deny or discriminate in the terms and conditions of a mortgage or loan | more...

October 3, 2014

FHA Mortgage Rate Loan Trends For The Week Ending Friday October 3 2014

By Joe Wallace

For entire year to date, September was one of only a handful of months that had consistently upward movement in mortgage loan interest rates. Many house hunters and investors welcomed the end of September after some steady upward pressure on rates that finally started slacking off toward month’s end. FHA mortgage rates at the end of the month have seen small improvements but this week marked a push back to the summer’s lows. FHA mortgage rate trends were up and down the week ending October 3, 2014; rates pushed slightly higher on the last day of the month, but the first day in October brought with it more improvement in rates that had started off small in the second half of September. The first day of October helped erase most, if | more...

September 26, 2014

FHA Mortgage Rate News For The Week of September 22 2014

By Joe Wallace

September has been a rough month for FHA mortgage loan rates–there’s been an upward trend fueled at least in part by the recent Fed policy statement, which many anticipated as a possible indicator of where rates might be headed (predicting investor reaction to an announcement that indicated a stronger or weaker economy). But this week, we saw rates moving lower–the best execution numbers haven’t really changed, but the downward trend is a welcome one. In many cases borrowers will see the lower moves reflected in closing costs rather than in actual lower interest rates, but if the downward movement continues we may well see FHA rates shift out of their current range of numbers and back into the lower best execution rate of 3.75%. The downward trend we saw this | more...

September 18, 2014

FHA Mortgage Rate News For The Week of September 15 2014

By Joe Wallace

We’ve seen recent trends in FHA mortgage loan rates towards higher numbers, but this Wednesday was a much anticipated day for the rates as investors and market watchers waited to hear the Fed made a policy announcement. The announcement did put upward pressure on rates, but we’ve seen some important movement in them already– September 12 was the day when best execution rates for FHA mortgage loans were pushed out of the previous single number comfort zone of 3.75% and back into a range of rates between 3.75% and 4.0, best execution. This is the first time in many weeks, if not months, that we’ve seen rates for FHA mortgages (best execution) move back into the 4% zone. On Wednesday, September 17, the range of FHA loan rates persisted, thanks | more...

September 9, 2014

FHA Loan-To-Value Ratios, Down Payment Requirements

By Joe Wallace

FHA loans are different than conventional loans for a variety of reasons, including the amount of the down payment required. The comparatively lower down payment for FHA loans is one of the biggest advantages–borrowers who have to budget for a smaller down payment have more money to use in other areas of the FHA loan such as the fees for appraisals and compliance inspections. One important question on the minds of many borrowers involves how much the FHA will guaranty on the loan, what the down payment on that amount might be, and how these numbers are calculated. The maximum amount of the FHA loan is different than the maximum amount the FHA will guaranty on the loan. The borrower and lender could theoretically agree on a loan amount higher | more...

August 27, 2014

FHA Eliminates Post-Payment Interest Charges

By Joe Wallace

The FHA has announced the elimination of certain interest payments previously owed beyond the date the FHA mortgage was paid in full. According to the press release HUDNo.14-104, titled, “FHA To Eliminate “Post Payment” Interest Charges, “borrowers who prepay their FHA-insured mortgages will not have to make interest payments beyond the date their mortgage is paid in full.” A new FHA rule known as “Handling Prepayments: Eliminating Post-Payment Interest Charges”, will apply for FHA mortgages closed on or after January 21, 2015. According to the press release, the new rule, “explicitly prohibits lenders from charging borrowers post settlement interest, which is broadly defined as a ‘prepayment penalty’ by the Consumer Financial Protection Bureau (CFPB), for all FHA Single Family mortgage products and programs.” This is an important development for borrowers | more...

August 7, 2014

FHA Loan Application Basics

By Joe Wallace

FHA loans are much like conventional loans when it comes to applying and qualifying. Like a conventional loan, your lender will need your credit, income, and employment history data to make a determination on loan approval. Where FHA loans stop being like conventional mortgages includes the amount of down payment required (the FHA has a much lower requirement in many cases), the interest rate (which can also be lower than conventional loans depending on circumstances) and occupancy rules. What are some of the basic things you need to know about FHA loan applications? First, it’s best to be careful when filling out your credit and employment information. Omitting or concealing past issues is not recommended. The lender will get a comprehensive picture of your credit history when looking at the | more...

August 6, 2014

FHA Loan Reader Questions: FICO Scores, Loan Amounts

By Joe Wallace

A reader asks, “I have a FICO of 610/608/586. Is there a chance of getting approved for a loan? How much if so? And where would I begin?” FHA loan rules specify that borrowers with FICO scores above 500 are eligible to apply for an FHA mortgage loan. However, lender standards are often higher than FHA minimums so you would need to check with the individual lender to see whether such scores are acceptable. The FHA cannot force a lender to offer FHA mortgage loans or refinance loans to those who don’t meet the financial institutions minimum FICO score guidelines. Borrowers who ask “how much?” are asking a common question, but the answer depends on the sale price of the home and the appraised value of that property. FHA loans | more...

August 1, 2014

FHA Loan Income Requirements: A Reader Question

By Joe Wallace

A reader asks, “I am applying for an FHA loan, I left a permanent position of 3 years to do contract work which I have done for over a year now. I am currently on my 2nd assignment which still has another 6 months minimum left on it, with a possibility of an extension – I am a W-2 contractor (not 1099.) Would I be disqualified since I only have a one-year history as a contractor vs being a permanent employee?” Let’s examine what the FHA loan rules printed in HUD 4155.1 say about income and employment verification. To star with, let’s look at the FHA instructions to the lender for analyzing employment: “When analyzing the probability of continued employment, the lender must examine • the borrower’s past employment record | more...

July 23, 2014

FHA Loan Income Requirements: A Reader Question

By Joe Wallace

A reader asks, “My spouse is waiting an immigration process. Is there any way we can count all or partial income? My credit is at $800 and we have no other debts.” This is a difficult question to answer without knowing more. The big question is whether the spouse income is verifiable or not–FHA loan rules require all income to be used in the debt to income ratio calculation (which is an important part of the loan approval process) to be verifiable. What does this mean? Verifiable income is defined as earnings that are stable, reliable, and likely to continue. Verifiable income is not always “taxable income”–veteran benefits, for example, may be counted as income even though they are tax-exempt. But some types of income can’t be used. Non-verifiable income | more...