A reader asks, “Let’s say a borrower misses a month’s payment. The next month, they have enough money for one payment, but not the two months that they owe. Can the lender tell them not to pay until they have enough money for *all* that they owe, preventing them from at least not getting further behind in their payments? This feels unethical; is it legal?”
Skipping payments on an FHA loan is a bad idea in general. The reader did the right thing by contacting the lender as soon as there was a problem making the payments–borrowers should always work closely with a lender in order to avoid going into FHA loan default and foreclosure.
But in situations where the borrower isn’t sure if the participating FHA lender is helping them do the right thing, or when the lender’s advice seems unclear, unethical, or illegal, there’s only one thing to do–go to the FHA directly to get assistance.
We cannot offer legal advice here–we’re not lawyers or legal experts. But a borrower concerned about advice such as this should contact the FHA directly by calling 1-800 CALL FHA to discuss the particulars of the situation and get advice on how to best proceed. It’s also advisable to contact the Consumer Financial Protection Bureau at (855) 411-2372 for help.
It’s important to point out that our giving this advice does not assume guilt on the lender’s part, nor does it assume that the borrower has/doesn’t have a legitimate complaint. We don’t know anything about the circumstances of the reader question beyond what was described here–but it’s good for readers to know they do have recourse when there’s a problem associated with an FHA mortgage loan. That recourse is available from both the FHA and the Consumer Financial Protection Bureau.
Sometimes the only line of defense we have against unfair, unethical, and illegal practices is the person making the complaint–borrowers who ask questions or report activity that seems out of the ordinary can go a long way toward preventing such activity. Being an informed borrower is very important.
Do you have questions about FHA home loans? Ask us in the comments section. You can apply or get pre-approved for an FHA loan at FHA.com, a private company and not a government website.