Articles Tagged With: FHA Refinance Options

May 9, 2013

HUD Settlement Reached In Housing Discrimination Cases

The FHA and HUD have issued a press release concerning two cases of alleged housing discrimination where settlements have been reached. According to HUDNo.13-067, two conciliation agreements have been reached between the Department of Housing and Urban Development and SunTrust Mortgage Inc. “settling allegations that the Richmond, VA-based lender denied mortgage loans to a couple in Port St. Lucie, FL, and another couple in Ashland, VA, because the women were on maternity leave.” As the press release states, Fair Housing Act laws make it “unlawful to discriminate in residential real estate-related transactions based on race, color, national origin, religion, sex, disability, or familial status.” Lenders cannot, under the Fair Housing Act, deny a loan application because a person is pregnant, or deny a loan because the borrower has taken maternity | more...

May 9, 2013

FHA Loan Reader Questions: HOA Issues

By Joe Wallace

A reader asks, “The town home next door is ruined by fire in July 2012 and not repairing. Trash in carport…I have one wall connecting with that house and my roof is damaged too. I contacted the HOA (I pay $ 100 each month and they should repair roof, clean up territory, etc) but they will DO NOT make any repairs or clean-ups. Even broken sidewalk by broken unit not repaired! I contacted the City and few Code Enforcement officers show up, now is almost year gone but no repairs…I call Code Enforcement again, but they told me, ‘case in progress’ and nothing more. How I can save my house from damage from that broken unit next door – and make Association do the work and repair the roof and | more...

May 2, 2013

FHA Loan Reader Questions: Short Sales, Credit Scores and FHA Loans

By Joe Wallace

A reader asks, “I was in the Independent Foreclosure Review. I was put in a modification for a year made all my payments and they sold my mortgage and then sent me a letter saying I was denied. I ended up short saleing on 7/5/11. My credit score is 561, what are my chances of getting an FHA loan?” Short sales in and of themselves may not be an automatic barrier to an new FHA home loan if the borrower was current on the mortgage at the time of the sale. You may find that in cases where there was a delinquency or late payments at the time of the short sale, a borrower may be required to wait at least 12 months from the time of the last late | more...

April 17, 2013

FHA Amends Guidance For Hurricane Sandy Disaster Assistance

By Joe Wallace

The FHA has issued a new mortgagee letter amending its guidance and policies for Hurricane Sandy disaster relief as well as general guidelines for disaster assistance related to FHA home loans, loan forbearance and related measures. Mortgagee Letter 13-11 states, “As indicated in Mortgagee Letter 2012-23, HUD requires a moratorium on foreclosures of properties in Presidentially-Declared Major Disaster Areas (PDMDAs) for a ninety (90) day period beginning on the date of each Disaster Area Declaration. The moratorium applies to the initiation of foreclosures AND foreclosures already in process. As necessary, HUD may communicate further specific guidance for extension of moratorium periods for individual disasters.” Additionally, “During foreclosure moratorium periods, HUD expects servicers to make every effort to communicate with and assist affected borrowers in rebuilding or repairing damaged properties, minimizing | more...

March 26, 2013

FHA Loan Reader Questions: Loan Applications

By Joe Wallace

A reader asks, “Are all FHA loans , down payments, and everything regarding my future home have to be dealt with an authorized lender or can I deal with FHA directly? If this is the case, where do I have to send all paperwork?” The answer to this question is fairly simple–all FHA loans and FHA refinance loans are handled via a participating lender. Borrowers must apply via the lender, who processes the paperwork and submits it to the FHA where appropriate. The FHA single-family mortgage loan program does not feature a “direct application” process where the borrower submits loan paperwork to the FHA. This is part of a common misconception about the FHA loan program. The FHA does not lend money directly to borrowers, set or maintain interest rates, | more...

March 20, 2013

FHA Loan Answers: Rules For Occupancy

By Joe Wallace

We answer a lot of reader questions about FHA loans. One of them most common involves the FHA occupancy regulations for single family loans. Readers want to know if they can rent out a house purchased with an FHA loan under the single-family mortgage program. Is this possible? Are FHA single-family mortgages available for vacation homes or other limited-occupancy residences? A look at the FHA loan rulebook clears up these questions quickly According to HUD 4155.1, Chapter Four Section B, we learn the following under the section titled Eligibility Requirements For Principal Residences: “This topic contains information on eligibility requirements for principal residences, including • a definition of principal residence • the FHA requirement for establishing owner occupancy • FHA-insured Mortgages on principal residences and investment properties, and • exceptions | more...

February 21, 2013

FHA Refinance Loan Questions: Credit Requirements

By Joe Wallace

A reader asks, “My divorce was final last March. My ex got the house. He’s suppose to be getting it refinanced but has been turned down twice for the Streamline. What are we missing? It was “transferred” to him through divorce, he has all documents showing he’s made the payments since we bought the house 5 years ago to present. And what’s the “non-credit” qualifying requirement? From what I’ve read, he should be good to go with that but the lenders, or lack thereof, keep turning him down due to debt/income ratio.” Reader questions like these are common; unfortunately there are too many variables that could affect a refinance loan application to answer this reader’s query specifically. What variables could be at work in situations like these? Any number of | more...

February 7, 2013

FHA Loan Reader Questions: FHA Loans After a Foreclosure

By Joe Wallace

A reader asks, “I had a bankruptcy discharged in 2009. My mortgage was part of this bankruptcy however the bank did not foreclose until 2012. I am employed and have an average credit score of 678. Would I qualify for a FHA loan on a new property?” This is a tricky question because it includes both a bankruptcy AND a foreclosure. In such cases it’s best to contact the FHA directly for advice. Does the borrower’s two situations–bankruptcy and foreclosure–have any special consideration? There are different possibilities depending on the type of bankruptcy (not mentioned in the reader question), but let’s examine the FHA rules for the borrower’s more recent foreclosure issue. Can a borrower apply for an FHA mortgage in 2013 if there was a foreclosure action in 2012? | more...

February 6, 2013

FHA Loan Rule Changes

By Joe Wallace

The FHA has issued several rule changes recently including alterations to the FHA HECM and HECM Saver programs, new guidelines for mortgage insurance, and also the procedures for how some FHA loan applications must be processed with credit scores and debt-to-income ratios that exceed certain new guidelines. For example, FHA refinance loans for borrowers with negative equity in their homes have new guidelines which state, “Refinances of Borrowers in Negative Equity Position where the borrower has a decision credit score below 620 and the debt-to-income ratio exceeds 43.00% must be manually underwritten.” The same is true in cases of FHA Energy Efficient Mortgages. New FHA rules state, “While Energy Efficient Mortgages where the borrower has a decision credit score below 620 and the debt-to-income ratio exceeds 43.00% must be manually | 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...