Articles Tagged With: Real Estate

December 8, 2015

FHA Mortgage Loans and Home Inspections

When you buy a home with an FHA mortgage, there is a process known as a appraisal that must happen prior to loan approval. An FHA appraisal involves a professional who reviews the property to insure it meets FHA minimum standards for safety, economic viability, and livability. Some mistake the FHA appraisal process for a home inspection, but the FHA and HUD are quick to point out that the appraisal is NOT a complete, top-to-bottom review of the home. We get comments and questions about this process in our comments section, and many of them have a familiar theme. Consider this recent reader comment: “…it boggles my mind how I could have bought my home 5 short months ago with an FHA loan and found out that it was infested | more...

December 1, 2015

Mortgage Rate Trends: Flat After The Long Weekend

By Joe Wallace

Monday saw no significant activity for mortgage loan interest rates following the long weekend. Tuesday could be–barring any breaking news or unexpected investor activity–equally quiet in anticipation of very important economic data releases coming later in the week. Wednesday through Friday there is increased potential for volatility based on the contents of reports including employment statistics, jobless claims, and more. Depending on the contents of these reports–and any breaking news that may occur in the meantime domestic or international–there’s increased risk of upward movement on mortgage loan rates this week. Industry professionals seem to be using the word “lock” more, pointing out that the closer we get to these economic data releases, the higher the risk of floating, or delaying an interest rate lock commitment with the lender in hopes | more...

November 30, 2015

Mortgage Loan Interest Rate Trends: Holding Steady on Black Friday

By Joe Wallace

Thursday was Thanksgiving, and with banks closed and the markets also not doing business, it was a short week. Mortgage loan rates stayed absolutely quiet on Friday, no surprise there as all eyes were on the Black Friday shopping news and other developments. But the coming week has some important scheduled economic data releases including jobless claims and the employment situation report. Factory orders is also a report due out this week–lots of potential indicators as to where the economy is heading (or is currently at) and that will no doubt fuel speculation about the Fed’s decisions about a possible December rate hike. In short, there is potential for volatility this week that borrowers on the fence about locking or floating should consider while making the choice. Floating could get | more...

November 25, 2015

Mortgage Loan Interest Rate Trends: Holding Steady After Some Upwards Movement

By Joe Wallace

Monday say mortgage rates moving slightly higher, while on Tuesday rates held steady. There’s some market volatility this week for reasons that include the Thanksgiving holiday–rates may well move into a defensive posture on Wednesday in anticipation of the down day on Thursday. Add to that the uncertainty over a Fed interest rate hike in December and you have a combination of factors that equals a risky time to float, at least in the minds of some industry pros. 30-year fixed rate conventional mortgages are, at the time of this writing, between 4.0% and 4.125% depending on the lender (best execution). The rate changes we’ve seen this week so far may be reflected in closing costs rather than an actual higher interest rate, so borrowers should know that when they | more...

November 24, 2015

HUD 4000.1 On Appraisals: Sewage Systems

By Joe Wallace

In a recent blog post, we examined what FHA loan rules in HUD 4000.1 say about water utility systems. Borrowers and sellers alike should know the FHA stance on public utilities–especially where it comes to water hookup: “The Mortgagee must confirm that a connection is made to a public or Community Water System whenever feasible and available at a reasonable cost. If connection costs to the public or community system are not reasonable, the existing onsite systems are acceptable, provided they are functioning properly and meet the requirements of the local health department.” That’s part of the entry in HUD 4000.1 about water utility systems, but there is also a separate entry for sewage. This entry begins by basically restating the above for clarity: “The Mortgagee must confirm that a | more...

November 19, 2015

Mortgage Rate Trends: Unchanged To Slightly Higher

By Joe Wallace

All eyes were on the Fed on Wednesday in anticipation of the release of Fed meeting minutes many hoped would give a bit more clarification to the possible December interest rate hike that’s been discussed. After the release of those minutes, mortgage rate behavior only changed a small amount, leaving best execution rates more or less where they have been in the last few days. Is a rate hike coming in December? That has not been confirmed (the Fed is definitely pointing towards the possibility), but many sources believe that interest rates for mortgage loans probably won’t take any steep plunges before that issue is cleared up. We’re likely staring at a tight range of rates until that happens. Some feel there is still potential for rates to move lower | more...

October 9, 2015

Know Your Rights Under The Fair Housing Act

By Joe Wallace

Recently we posted about an FHA/HUD press release announcing action against a Pennsylvania landlord who allegedly discriminated against families with children in his rental practices. The same kinds of violations of the Fair Housing Act can occur when trying to buy a home, and such cases are important as awareness-raising tools. When examining these issues, it becomes apparent that many people aren’t fully aware of their rights under the Fair Housing Act. Renters, house hunters, landlords and property owners alike are affected by this important federal law. But what ARE the rules under the Fair Housing Act? You can find a wealth of information at the FHA/HUD official site, which features a page called Fair Housing-It’s Your Right. That page includes (but is not limited to) the following information: “The | more...

October 8, 2015

HUD 4000.1: FHA Loan Rules On Escrow Accounts

By Joe Wallace

When the FHA and HUD switched over to the new FHA Single Family Home Loan policy handbook (HUD 4000.1), it restated some policies, redefined others, and made additions where needed. We’ve been examining FHA loan rules as published in HUD 4000.1 over a variety of topics to help borrowers and lenders alike understand FHA policy as it now stands in the new rulebook. One area some borrowers need information on is escrow accounts. FHA loan regulations address the use of escrow, but do not require it. Your lender might, and is free to do so under the FHA Single Family Home loan program, so it’s good to know the rules. The first thing HUD 4000.1 does is to define the term “escrow”: “An Escrow Account is a set of funds | more...

What you should know about FHA 203(h) Loans For Disaster Victims

October 7, 2015

FHA Loans, HUD 4000.1, and Second Appraisals: When One Can Be Ordered

By Joe Wallace

In our last blog post we discussed FHA appraisals, and the fact that FHA loan rules do not permit the request of a second appraisal simply to raise the value of the property or to eliminate required corrections listed on the original appraisal report. So when can the lender order a second appraisal? What circumstances justify this action? The answer can be found in HUD 4000.1, Section II, Part A. According to this part of the FHA loan rules under “Second Appraisals By Original Mortgagee”: “A second appraisal may only be ordered if the Direct Endorsement (DE) underwriter (underwriter) determines the first appraisal is materially deficient and the Appraiser is unable or uncooperative in resolving the deficiency. The Mortgagee must fully document the deficiency and status of the appraisal in | more...

October 6, 2015

FHA Loan Appraisal Rules: The Roof

By Joe Wallace

A recent reader question about the FHA appraisal requirements had us looking up details on those requirements in the new FHA Single Family loan handbook, HUD 4000.1. The previous FHA loan rulebooks including HUD 4155.1 and HUD 4155.2 have been superseded by HUD 4000.1, so it seemed like a good idea to post the FHA’s current appraisal requirements for the roof since it’s one of the most commonly asked-about parts of the home with respect to the FHA appraisal process. When the FHA appraiser comes to review the property, the roof is one of the areas that must be evaluated. According to HUD 4000.1 Part II Section B: “The Appraiser must notify the Mortgagee of the deficiency of MPR or MPS if the roof covering does not prevent entrance of | more...