Articles Tagged With: HUD

August 25, 2015

Preparing For Your FHA Loan Application

There are several factors that affect your FHA loan application. Some begin the journey to home ownership with methodical planning and research, others may become interested after seeing an ad or a home for sale that looks particularly tempting. If you’re brand new to the home loan process, here are some steps that can help you get ready to make the tough choices about your home and FHA loan options. Know Your Market Which homes in which neighborhoods have the most competitive prices? Is the housing market in your area on the rise? Is it changing due to construction or new development in areas that were under-utilized or previously blighted? What would your new neighborhood offer you in terms of services such as shopping, day care, etc.? Know Your Lenders | more...

August 25, 2015

FHA Mortgage Rate Trends: Slightly Lower As Stock Market Varies

By Joe Wallace

Mortgage rates were, in the eyes of some observers on Monday, quite conservative in the shadow of stock market ups and downs. Rates did creep a bit lower, putting 30-year fixed rate conventional mortgages solidly into 3.875% territory, best execution. That eliminates the previous range of best execution rates for 30-year fixed conventional rates that saw 3.875% at the low end. FHA mortgage loan rates are still in their comfort zone of 3.75% best execution, though as always rates may vary more among participating FHA lenders. Best execution rates are not available to all borrowers or from all lenders–your experience may vary depending on your FICO scores and other financial qualifications. The availability of a participating FHA lender may also play a role in your access to rates like theses. | more...

August 22, 2015

Mortgage Rate Trends: Moving Lower

By Joe Wallace

Mortgage rates closed out the week by moving lower–some sources are labeling the current rates as the lowest in over three months. Rates edged higher ahead of the release of Fed meeting minutes, but every day after that (for three days in a row) there has been some form of improvement. That three-day improvement helped bring 30-year fixed rate conventional mortgage loans back into a range of rates with 4.0% at the upper end of the range and 3.875% at the bottom end, best execution. FHA mortgage loan rates, best execution, haven’t shifted out of the 3.75% comfort zone, but chances are good that if the improvement continues we’ll see FHA rates follow suit and move into a range of numbers with 3.75% at the high end. Again, that’s assuming | more...

August 11, 2015

HUD Mortgage Board Takes Action Against Two Lenders

By Joe Wallace

A press release on the FHA/HUD official site announces HUD action against two Texas-based lenders. HUDNo.15-102, published Monday August 10, 2015, states: “The U.S. Department of Housing and Urban Developments Mortgagee Review Board (MRB) today announced settlement agreements with two Texas mortgage lenders following allegations they engaged in a scheme to charge bogus fees to consumers, which improperly inflated mortgages for borrowers purchasing newly constructed manufactured housing.” 11 violations of FHA lending rules were alleged in the case. According to the press release, the HUD Mortgage Review Board claims, “American Home Free Mortgage, LLC (AHFM) of Prosper, Texas, artificially increased mortgage costs by an average of $12,000 per loan through illegitimate fees paid to a company owned and operated by its sales manager. In addition, HUD alleged that there were | more...

August 4, 2015

FHA Loan Rules: Prohibited Payments And Loans

By Joe Wallace

There is a group of rules in HUD 4155.2 that describes payments and loans that are not permitted under the FHA single-family home loan program. Chapter Six, Section A has a description of the rules preventing the payment of “unearned fees”, below market-rate loans and other practices. For example, Chapter Six instructs the lender: “A lender is not permitted to pay any fee, compensation, or thing of value other than for services actually performed, including –kick back fees –fees above that actually paid for the service –finders fees or payments to any party referring the loan –payment to a party that has received, or will receive other payment for the service, unless it is a commission for selling a hazard insurance policy at the borrowers request, and –fees prohibited by | more...

July 29, 2015

FHA Loans And Your Credit

By Joe Wallace

A reader got in touch with us this week to ask if it is possible to get an FHA mortgage loan even if the borrower doesn’t have “perfect credit”. While it’s not clear what the reader means by that phrase, we can answer the question in a general way. The simple answer is yes, borrowers can apply for and get approved for FHA home loans with less than perfect credit, but much depends on the nature of the credit issues on your report and whether there’s an overall pattern of responsible credit use the lender can use to justify approving your home loan. FHA loan rules are clear that individual mistakes in a borrower’s past should not be the sole determining factor when it comes to approving or denying an | more...

July 29, 2015

FHA Refinance Loan Options

By Joe Wallace

Looking for a refinance loan? Do you know what your options are as a homeowner when it comes to refinancing from a non-FHA loan to an FHA mortgage? Or are you in need of an FHA-to-FHA refinance? There are many options available, some of which may surprise you. Did you know there is one type of FHA refinancing which has no FHA-required credit check? Borrowers who are currently paying on adjustable rate mortgages should take a close look at FHA refinance loan options for a variety of reasons. Those who have non-FHA loans can refinance into fixed rate FHA loans, or refinance into another adjustable rate mortgage (ARM)–FHA loan rules permit both options for qualified borrowers. Non-FHA borrowers looking to refinance into an FHA mortgage will be required to get | more...

July 28, 2015

FHA and HUD Recognize A Year Of Opportunity

By Joe Wallace

The FHA and HUD are reminding borrowers about an important change made to the FHA single family home loan program in conjunction with a new HUD press release titled, “A Year of Progress: Delivering on the Promise of Opportunity”. The Department of Housing and Urban Development is approaching its fifth decade of service. The press release states, “As HUD approaches its 50th anniversary, Secretary Castro is laser focused on advancing policies that provide folks with access to quality housing, good schools, transportation and economic opportunity. We recognize housing as a platform for Americans who are striving to improve their lives and break the cycle of poverty for the next generation. As needs for our services have increased, HUD will continue to invest in initiatives that have demonstrated outcomes in helping | more...

July 23, 2015

FHA Loan Down Payments: How Your Lender Verifies Cash Saved At Home

By Joe Wallace

In our previous blog post we discussed some of the rules for down payment funds on an FHA home loan. Did you know the FHA requires its participating lenders to verify the sources of all down payment money? This is to prevent funds coming from unacceptable sources such as credit card cash advances or payday loans. Borrowers are permitted to bring in a down payment with money saved at home, but the FHA loan rulebook has specific instructions to the lender about how this type of down payment money is to be verified and handled. Chapter Five of HUD 4155.1 tells the lender that money saved at home should be verified with help from the borrower who must provide specific information about the funds. “To verify cash saved at home, | more...

July 20, 2015

FHA Loans, Seller Concessions, and Cash To The Borrower

By Joe Wallace

We recently got a question about an FHA loan situation where the seller of the home agreed to pay 3.5% of the closing costs on a transaction. According to the reader question, the “actual permitted seller concessions” were much lower. The reader asked, “Since FHA would not allow cash back”, the buyer asked the seller for the difference of the two amounts to be paid to the borrower, “outside of closing” The question the reader asks: Is this legal? FHA loans do not permit cash back to the borrower except in the form of refunds. However, HUD 4155.2 does include some guidelines for seller concessions, which are limited to six percent of the sales price. Those guidelines do permit “monetary gifts” as we’ll read in a moment. Chapter Four of | more...