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Articles Tagged With: Single Family Handbook 4000.1

November 20, 2012

FHA Issues Mortgagee Letter, Sets Policy For Federal Disaster Areas

By Joe Wallace

Whenever a natural disaster strikes and a federal disaster area is declared in the affected zone, the FHA and HUD have issued guidance about foreclosure moratoriums, assistance for those trying to recover from the disaster and other details. These announcements are usually issued as Mortgagee Letters and come out on an as-needed basis. But now the FHA has codified its position on federally declared disaster areas in general, thanks to the new FHA/HUD Mortgagee Letter, 12-23, “Guidance for FHA-Approved Mortgagees Originating and Servicing Mortgages in Presidentially-Declared Major Disaster Areas”. According to the announcement, “This Mortgagee Letter (“ML”) provides general guidance to FHA-approved mortgagees with loans in any Presidentially-Declared Major Disaster Areas (“Disaster Areas”). Further specific guidance for individual disasters may be communicated as necessary.” This general guidance includes, “A moratorium | 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 30, 2012

FHA Warning On Scams Related to the National Mortgage Settlement

By Joe Wallace

In early 2012, a landmark mortgage settlement between five major lenders and the U.S. government was reached after complaints were filed regarding home loan abuses and foreclosure abuses. According to a Department of Justice press release dated March 12, 2012, “The Justice Department, the Department of Housing and Urban Development (HUD) and 49 state attorneys general announced today the filing of their landmark $25 billion agreement with the nation

 

October 8, 2012

HUD Reaches Settlement in Pennsylvania Discrimination Case

By Joe Wallace

On the FHA/HUD official site you’ll find a press release announcing a settlement in a discrimination case against a Pennsylvania company that allegedly discriminated against families because of their national origin. According to HUDNo.12-160, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached a Conciliation Agreement with the Lancaster, PA-based Ecklin Group that will end an alleged policy of refusing to rent to Burmese refugee families.” The press release adds, “The agreement is the result of a complaint HUD initiated against the Group after company staff allegedly failed to renew the leases of three Burmese families because of their national origin, and made statements to various people that the group would no longer accept rental referrals for refugees that were referred by Lutheran Refugee | more...

 

September 27, 2012

FHA Issues Guidance To Lenders On Hazard Insurance Payments Following Hurricane Isaac

By Joe Wallace

The FHA has issued a reminder to lenders to “quickly release hazard insurance payments” to affected borrowers trying to recover from Hurricane Isaac. According to an FHA press release, HUDNo.12-156, the FHA wants to “reinforce its existing policy requiring lenders to release insurance payouts to homeowners eager to rebuild their damaged homes following disaster.” The release states, “In the past, the U.S. Department of Housing and Urban Development (HUD) noticed some lenders would instead use these insurance funds to pay off the outstanding mortgage balance, leaving many homeowners without the resources they need to rebuild their homes.” Carol Galante, FHA

 

September 18, 2012

FHA Issues Revised Condo Project Approval Guidelines For Non-Residential Use

By Joe Wallace

The FHA and HUD have issued revised condo project approval guidelines for a number of areas, including the rules governing non-residential use of condo project floor space. According to Mortgagee Letter 2012-18, “This Mortgagee Letter (ML) puts in place temporary condominium project approval guideline changes to some of the current FHA condominium approval policy provisions.” The letter also says, “These changes replace, for the period specified by this ML, certain approval requirements specifically identified in this ML that were established in ML 11-22 and the attached Condominium Project Approval and Processing Guide (Guide). It was determined that certain policy adjustments were needed to address current housing market conditions.” (Emphasis ours.) A section of the mortgagee letter addresses the FHA rule on non-residential use and/or commercial use of condo space in | more...

 

August 28, 2012

FHA Loans, Fair Housing Laws, and Discrimination: What You Can Do

By Joe Wallace

In the month of August, 2012, the FHA/HUD official site reported no fewer than four cases investigated by the Department of Housing and Urban Development related to housing discrimination. In one case, the owners of an Alabama mobile home park were charged with discriminating against an African-American family; another case that reached the settlement stage in Alabama involved discrimination against Hispanic residents. Two more cases, one in West Virginia and another in Minnesota, involved racial bias and discrimination due to a medical condition. FHA loan rules, state laws and federal statutes forbid discrimination of any kind in the housing process. Whether you are applying for a home loan, looking for rental housing, or trying to renew leases or refinance, it is illegal to deny housing for reasons of race, creed, | more...

 

June 13, 2012

FHA Loan Reader Questions: Can I Buy Another Home With An FHA Mortgage Loan?

By Joe Wallace

A reader asks, “We purchased our first home using an FHA loan – 5% down. We have outgrown our home due to an expanded family and we are looking to purchase another home that is bigger – is it possible to qualify for another FHA loan – we have at most 10% to put down towards a new home. Our plan would be to rent out this current home we have as it is in a good rental area. Any advice on how we can achieve this?” FHA loan rules, according to the official site at FHA.gov, include a restriction on issuing single-family mortgage loans to investors. Due to this restriction, the official site says, “FHA generally will not insure more than one mortgage for any borrower (transactions in which | more...