Articles Tagged With: FHA Updates

March 11, 2015

Disputing Bad Credit Information Before Applying For An FHA Loan

A recent article published by Marketplace reports that disputing bad credit information on your credit report is going to be easier than in years past. According to the article titled, “Disputing bad credit is about to get a whole lot easier”, “The nation’s three biggest credit reporting companies—Experian, TransUnion, and Equifax—are changing the way they collect and report the credit scores. The changes involves the way bureaus handle credit-rating disputes, as well as how they report unpaid medical bills.” That can be a big help for borrowers who need to deal with credit agencies or manage credit applications while dealing with medical expenses. According to the article, “Under the Fair Credit Reporting Act, all credit error claims are entitled to a ‘reasonable investigation’. In practice however, that wasn’t happening. Chi | more...

February 28, 2015

FHA Loans and Co-Signers: A Reader Question

By Joe Wallace

A reader asks, “My husband and I are trying to assume this fha loan. My debt to income ratio is too high. My mother in law will gladly co sign for us.” “My husband will not be on the loan, just me. Is it possible for my mother in law to co sign with just me on the loan? I’ve called (LENDER NAME DELETED) (whom own the loan) I have gotten two different answers. One lady said yes and now the other today is saying no. I’m waiting on (LENDER NAME DELETED) to call back. I thought as long as it was blood, marriage, or law related they could “ Co-signers and non-occupying co-borrowers are permitted on FHA loans. Depending on the circumstances a non-occupying co-borrower or co-signer situation may | more...

February 19, 2015

FHA Loan Reader Questions: Loan Repayment History

By Joe Wallace

A reader asks, “I had to get a hard loan to buy my property. Have paid faithfully and am building credit, in the 700′s. Never had bankruptcy or any of that. Divorced mother with own business. Property has substantial equity now. To boost up chances to refi, will they (underwriter) investigate hard loan mortgage responsibility and history to boost refi chances of being approved?” Lender standards vary, but in general all lenders want to examine a borrower’s history of repayment on financial obligations to determine a borrower’s creditworthiness. Let’s examine the FHA’s stance on the issue of timely payments and establishing a solid payment history. What follows is from the FHA loan rulebook, HUD 4155.1 Chapter One: “The purpose of underwriting is to determine a borrower’s ability and willingness to | more...

February 9, 2015

FHA HECM Loans and Appraisals: A Reader Question

By Joe Wallace

A reader asks, “I am in the process of getting a reverse mortgage loan based on the approximate value of my home. If the Appraised value is considerably less than initially expected and/or extensive repairs are required to comply, do I have the option to back out of the loan process?” Without more information, this question is difficult to answer. How far along is the HECM loan process? Has the reader signed any legally binding paperwork that commits him or her to closing the deal? These are important questions to ask and borrowers in these cases should approach the lender directly for assistance. If the borrower feels that he or she has not signed a contract or other legally binding document that commits the HECM loan to close, yet feels | more...

February 6, 2015

FHA Loan Forbearance: A Reader Question

By Joe Wallace

A reader asks, “Got fha loan for our home on Dec 2011. We have been doing fine until early 2014, we got a little behind. We have never let any payment be more than 30 days late, but we had some late payments to our bank on this loan. My wife is out of work after this month. Do we have any forbearance options?” In situations like these it’s extremely important to being talking with the lender right away. FHA loans do have forbearance options for qualified borrowers, but many of a borrower’s options are most plentiful before the mortgage becomes delinquent. Working with your lender at the first sign of trouble with the mortgage loan is a very important move towards foreclosure avoidance. According to the FHA official site: | more...

January 28, 2015

FHA Loans, Co-Signing, and Student Loan Debt: A Reader Question

By Joe Wallace

A reader asks, “I co signed for a student loan for my daughter who has 2 1/2 years left of schooling. This puts her at around 3 years out before needing to start making payments on this debt. i’m looking to get pre approved for a mortgage in the next 6 months. Does the loan, being 3 years out before repayment begins act negatively towards a FHA loan approval?” FHA loan rules do include scrutiny of any debt the borrower may be liable to repay as a co-signer, but individual lender standards may vary. However, the timing of the student loan debt in this case may play a positive role. Let’s look at what HUD 4155.1 says about student loan debt in general in connection with an FHA loan application. | more...

January 28, 2015

Chapter 13 Bankruptcy and FHA Refinance Loans: A Reader Question

By Joe Wallace

A reader asks, “Is It possible to refinance while in chapter 13 for a lower rate. We Don’t qualify for the government HARP program.” FHA loan rules for getting new loans when it comes to bankruptcy allow the lender to exercise some discretion depending on circumstances, but depending on the type of bankruptcy a borrower may also need the court’s permission to apply. Borrowers in Chapter 13 bankruptcy have some options according to HUD 4155.1 Chapter Four Section C which states: “A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA-insured mortgage, provided that the lender documents that –one year of the pay-out period under the bankruptcy has elapsed –the borrower’s payment performance has been satisfactory and all required payments have been made on time, and –the | more...

January 27, 2015

FHA MIP Cuts: Who Is Affected? A Reader Question

By Joe Wallace

A reader asks, “I am a homeowner with a FHA loan. I bought the house last year, I wanted to know if this will also benefit me or is just for you new perspective home owners? Thanks…” This reader question is in reference to the FHA mortgage insurance premium cut that took effect on Monday January 26, 2015. According to an FHA press release, “the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent. This action is projected to save more than two million FHA homeowners an average of $900 annually and spur 250,000 new homebuyers to purchase their first home over the next three years.” We wrote about this recently when the cuts took effect. But who is affected by | more...

January 26, 2015

FHA Mortgage Insurance Premium Cuts Begin Today

By Joe Wallace

On Thursday, January 8, 2014, the FHA and HUD issued a press release announcing a cut to the FHA’s required annual mortgage insurance premiums, also known as MIP. According to the press release, “As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent. This action is projected to save more than two million FHA homeowners an average of $900 annually and spur 250,000 new homebuyers to purchase their first home over the next three years.” As President Barack Obama pointed out in one speech, the amount saved thanks to the FHA’s MIP cut could be used, in some cases, to make a mortgage | more...

January 26, 2015

FHA Housing Counseling: A Reader Question

By Joe Wallace

A reader asks, “I would like to know if you recommend a first time home buyer class in Denver?” We don’t have the resources to recommend a specific agency or class as a function of this blog, but the FHA itself does have plenty of resources to help home buyer, including a referral service that can put potential FHA borrowers in touch with an FHA/HUD approved housing counselor in the borrower’s local area. To request this referral, call the FHA at their toll-free number: 1-800 CALL FHA and request a referral to a housing counselor for pre-purchase counseling. Borrowers can also search the FHA website for information on state or local programs at the State Info page on the FHA official site. The page for Colorado, for example, includes a variety | more...