Articles Published in: January 2013

January 7, 2013

Adding Repair Costs To An FHA Home Loan

When you want to purchase a home with an FHA guaranteed home loan, the property you want to buy must be appraised to determine its eligibility for the loan. A home that does not meet FHA minimum property requirements may not necessarily be ruled out for an FHA loan–an appraiser may note certain corrections that should be made to bring the home up to standard. In such cases, the loan may be approved contingent on those corrections being made. But can the expense of those corrections, when not paid by the seller, be included in the FHA loan amount? FHA loan rules provide for this, stating under what circumstances repair or improvement costs can indeed be added to the loan. According to HUD 4155.1 Chapter Two, “Repairs and improvements may | more...

January 4, 2013

Bank Of America Settles In FHA Sexual Orientation Discrimination Case

By Joe Wallace

A press release issued on January 2, 2013 announces a settlement between the Department of Housing and Urban Development and Bank of America regarding a discrimination case filed by the government. According to HUDNo.13-001, “The U.S. Department of Housing and Urban Development today announced an agreement with Bank of America (BOA) to settle a claim that the mortgage lender refused to provide financing to a lesbian couple. The agreement is the first enforcement action taken against a lender involving HUD’s recent rule ensuring that the Department’s core housing programs be open to all eligible persons, regardless of sexual orientation, gender identity, or marital status.” The case involves alleged violations of the HUD rule “Equal Access to Housing in HUD Programs Regardless of Sexual Orientation or Gender Identity” which prohibits lenders from | more...

January 3, 2013

Canceling An FHA Case Number: A Reader Question (Part Two)

By Joe Wallace

In our previous blog post, we addressed a question from a reader who asked, “Is it possible for the previous lender to cancel the FHA Case Number?” FHA case numbers may be canceled–there are rules that govern how this procedure is to be handled by the lender. The case number must be canceled in writing according to the procedure spelled out on the FHA/HUD official site. “The lender must notify the appropriate FHA Homeownership Center in writing to close outstanding files and cancel the FHA case number if the origination and closing of a loan will not be completed or if FHA mortgage insurance endorsement will not be sought.” The rules also remind lenders, “Please note that you cannot request a case number cancellation for an endorsed (insured) loan or | more...

January 3, 2013

FHA Case Number Cancellation: A Reader Question

By Joe Wallace

A reader asks, “Is it possible for the previous lender to cancel the FHA Case Number?” There is a bit of detail missing from this question that makes it a bit difficult to answer properly–is the reader asking whether a lender may cancel an FHA case number (or should) when the loan is transferred from one bank to another? Is the question simply asking whether it’s possible to cancel an FHA case number as opposed to letting it expire? Assuming this question involves a borrower who tried one lender, but decided to go with another, what do the FHA and HUD have to say about FHA case number cancellation? The rules are clear–lenders do not cancel FHA case numbers in these cases, they are expected to cooperate in the transfer | more...

January 2, 2013

FHA Loan Questions: Appraised Value Versus Buyer Offer

By Joe Wallace

Our very first reader question of 2013! A reader asks, “We had a property under-contract for sale at an attractive price in exchange for a 12/31 close…but they were unable to close. The property appraised at the sales price. Now we have an offer at a higher price…also using FHA financing. Will the previous lower appraised value be a problem for us?” Not to be deliberately vague, but it really depends on how you define “problem”. According to FHA loan rules, “The maximum mortgage amount that FHA will insure on a purchase is calculated by multiplying the appropriate loan-to-value (LTV) factor by the lesser of the property’s sales price, subject to certain required adjustments, or appraised value. In order for FHA to insure this maximum loan amount, the borrower must | more...

January 1, 2013

Happy New Year!

By Joe Wallace

2013 is here! We look forward to helping you learn more about your FHA loan options, refinancing and related topics in the new year. Thank you very much for reading, for submitting your questions, and your replies. We wish you a safe and prosperous new year. Banks, stock markets, the U.S. post office and many other services are closed for the holiday…as are we. We’ll be back tomorrow for more answers to your questions and discussion of the issues. Happy New Year!