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Articles Published in: November 2011

FHA Loans and Foreclosure Avoidance: Some Basics

There have been several reader questions lately about the foreclosure process on FHA home loans. What options do FHA borrowers have when facing the risk of default and/or foreclosure on their FHA mortgages? A quick look at the FHA official site’s page on the subject of foreclosure avoidance at http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure reveals several options. One program known as HAMP is the Home Affordable Modification Program, which “lowers your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income to make your payments more affordable.” According to the FHA, a typical FHA loan modification under HAMP “results in a 40 percent drop in a monthly mortgage payment. Eighteen percent of HAMP homeowners reduce their payments by $1,000 or more.” Another program borrowers may consider is the Principal Reduction Alternative, | more...

 

FHA Loans and the Foreclosure Process

Foreclosure is the worst-case scenario for home owners, but many don’t understand how the process works or at what point the FHA borrower may be in danger of losing his or her home. If you don’t understand how the foreclosure process works, but fear you may be nearing default or worse on your FHA mortgage, it’s definitely time to get educated about foreclosure and get in touch with your lender. FHA guidelines encourage borrowers to work closely with both the lender and the FHA to avoid loan default. What is the FHA timeline when it comes to missed payments and foreclosure proceedings? Many don’t understand how this works. Borrowers who miss a single payment face a serious issue, but there is still time to work out the problem and avoid | more...

 

HUD Suspends Allied Home Mortgage Corporation

Allied Home Mortgage Corporation is no longer allowed to do business with the FHA or HUD, according to a November 1, 2011 press release from the Department of Housing and Urban Development. “The U.S. Department of Housing and Urban Development

 

FHA Loans and RESPA

FHA loans, like other mortgage transactions, are governed by a set of regulations including the Real Estate Settlement Procedures Act or RESPA. According to the official site at FHA.gov, “The Real Estate Settlement Procedures Act (RESPA) insures that consumers throughout the nation are provided with more helpful information about the cost of the mortgage settlement and protected from unnecessarily high settlement charges caused by certain abusive practices.” Borrowers who suspect those abusive practices have been used in their FHA home loan transactions (and/or conventional loans) are urged to report such problems. But where does the borrower start? What areas of the FHA loan transaction are governed by RESPA? According to the FHA, “RESPA is about closing costs and settlement procedures. RESPA requires that consumers receive disclosures at various times in | more...

 

FHA Borrower’s Rights–What Do They Mean?

There’s a page on the official site for the Department of Housing and Urban Development that describes an FHA loan applicant’s rights. “Attention Borrower,” the page begins, “This may be the largest and most important loan you get during your lifetime. You should be aware of certain rights before you enter into any loan agreement.” There’s a list of things a mortgage borrower has the right to expect from any home loan experience, including the right to shop around for the best loan and the right to be fully informed as to the total cost of your home loan. But what do these rights mean? Let’s examine a couple of them and define their terms. From the official site, “You have the RIGHT to shop for the best loan for | more...