Articles Tagged With: Mortgage Underwriting

September 12, 2012

Can an FHA Lender Enforce Special Requirements For Borrowers On Maternity Leave?

The FHA and HUD issue press releases about enforcement activity related to the Fair Housing Act, which addresses issues and questions such as the one in our headline, “Can an FHA Lender Enforce Special Requirements For Borrowers On Maternity Leave?” To answer that question, let’s look at a boilerplate statement found in almost every FHA/HUD release about anti-discrimination cases. “The Fair Housing Act

September 11, 2012

FHA Loan Reader Questions: Foreclosure Seasoning Periods

By Joe Wallace

A reader asks, “Apparently 2 years ago a home that we sold out-right and even received cash back had a foreclosure initiated. We are in the process of trying to buy a home at this time. Our credit report looks great score of 650 to 720. We were told we were pre-approved. the day before we were suppose to close we got a call saying we were denied because there was an embedded code the underwriter found stating that a foreclosure had been initiated.” “We were told that according to FHA guidelines, you must wait 3 years after a foreclosure. Is this true? Although it didn

September 4, 2012

FHA Announces Assistance For Louisiana Hurricane Isaac Victims

By Joe Wallace

Hurricane Isaac brought with it plenty of flooding and storm damage; the FHA and HUD have announced federal disaster assistance for affected areas in Louisiana. 35 parishes were affected by Isaac, and HUD Secretary Shaun Donovan has announced FHA/HUD relief efforts for “homeowners and low-income renters forced from their homes” due to the hurricane. According to a press release at FHA.gov, “President Obama issued a disaster declaration for Acadia, Allen, Ascension, Assumption, Avoyelles, Cameron, East Baton Rouge, East Feliciana, Franklin, Iberia, Iberville, Jefferson, Jefferson Davis, Lafourche, Livingston, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Pointe Coupee, Rapides, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, and West Baton Rouge Parishes. The President

August 31, 2012

FHA Loan Reader Question: Am I Eligible For an FHA Loan?

By Joe Wallace

A reader asks, “Me and my husband lost our home due to a house fire. We are currently in a Chapter 13 bankruptcy and have been since January of this year. Is there any way we can buy a new home in this situation? We both have jobs also.” FHA loan rules specifically address the circumstances a borrower who has a Chapter 13 on his or her record can get an FHA home loan. According to HUD 4155.1 Chapter Four Section C; “A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA-insured mortgage, provided that the lender documents that

August 30, 2012

FHA Loan Reader Questions: How Long To Close The Home Loan?

By Joe Wallace

A reader asks, “Once an offer has been made on a home, how long should it take a lender who has prequalified but not preapproved a loan to close on the home?” There are many variables at work with an FHA home loan, so there is no set time period. Many lenders may use a stock answer of between 30 and 45 days, but you should not expect an FHA loan to close within a week to ten days of the mortgage application. It is very important to point out that pre-qualifying for an FHA loan is not the same as having the lender process the loan application data, verify income and employment, and pull your credit reports. That process definitely takes time, which is why the 30-45 day window | more...

August 23, 2012

FHA Loan Reader Questions: Mortgage Insurance Payments

By Joe Wallace

A reader asks, “We paid $6755.53 cash up-front-fee included in our mortgage in 2008.

August 22, 2012

What Does My Lender Need To Process My FHA Loan Application?

By Joe Wallace

FHA loan rules specify a list of required documents and paperwork needed to process an FHA home loan properly. In addition to your application data, the lender needs a list of things in order to perform the “mortgage credit analysis”. Not all of these documents are supplied by the applicant, but some of the lender-generated paperwork requires the borrower’s permission in writing, such as the approval to pull credit reports from the three major credit reporting agencies Equifax, TransUnion, and Experian. The list of required documentation also includes “evidence of a Social Security number” which is usually your Social Security card or other documents the lender may accept as proof of your number. The lender must complete a verification of employment, which means following up on the data you provided | more...

July 26, 2012

FHA Refinancing Loans and Up Front Mortgage Insurance Premiums

By Joe Wallace

A reader asks, “I refinanced my home with a lender March 2011. That same lender called me a couple of months ago and said they could refinance me again at a 1/2 % less than what I am paying now at no out of pocket costs.” “They are charging me upfront mortgage insurance premiums of over $2,000.00. Do I have to pay the FHA UFMIP again, or are the trying to stick me with junk fees?” FHA loan rules on this subject are found in Chapter Seven of HUD 4155.2, Refinancing Loans. According to the FHA; “In most of the FHA mortgage insurance programs, FHA collects an

July 25, 2012

FHA 203(h) Loans For Disaster Victims

By Joe Wallace

In recent weeks we’ve posted several announcements about presidential disaster areas which were declared in Florida, Colorado, New Jersey, and Minnesota. One important benefit for some disaster victims in such cases is the FHA 203(h) Loan For Disaster Victims. This FHA loan program is described on the FHA official site; “Under the Section 203(h), Mortgage Insurance for Disaster Victims program, FHA provides mortgage insurance to assist victims of presidentially-declared disasters.

July 24, 2012

FHA Appraisal Transfers

By Joe Wallace

In our previous blog post about FHA appraisal portability and transfers, we discussed the fact that FHA appraisals which have not expired can be transferred from one lender to another if the borrower decides to change lenders prior to the FHA loan closing. This transfer is not automatic–the borrower is required to request the transfer, according to the rules issued in FHA Mortgagee Letter 09-29. Those rules also address something known as appraisal shopping, where a lender orders more appraisals, “to assure the highest possible value for the property and/or the least amount of deficiencies and/or repairs are noted and required by the appraiser.” Appraisal shopping is expressly forbidden by FHA loan rules, but there are circumstances where a second appraisal might be warranted. According to the FHA, those situations | more...