Articles Published in: October 2015

October 15, 2015

FHA Loans, Early Payoff, And Prohibited Fees: HUD 4000.1

With the publication of HUD 4000.1, existing FHA loan rules have been restated, updated, modified, or reprinted. In some cases nothing has changed, in other cases there have been major or minor alterations to the language, terms or conditions of these FHA loan rules. We’re examining many sections of the new rulebook and discussing common issues that may be affected by those changes, even if in some cases the rules haven’t changed. Knowing what’s in HUD 4000.1 as opposed to the old FHA single family home loan rules found in HUD 4155.1 and 4155.2 is important as HUD 4000.1 is THE definitive source for the program now. One big question some borrowers have about FHA loans is what happens if an early payoff is chosen. Can the lender penalize or | more...

October 15, 2015

Types of FHA Refinance Loans: HUD 4000.1

By Joe Wallace

We’ve written elsewhere about the different types of FHA refinance loans, but we haven’t covered what the new FHA Single Family loan program policy handbook (HUD 4000.1) has to say about them. In many cases, HUD 4000.1 either updates or restates existing policy, and in others the new handbook replaces or supersedes the old policies. It’s impossible to know every single alteration in FHA loan rules that have been printed in the new handbook, so we’re simply reporting what the new rules say to clear up any confusion over FHA loan rules old and new. Here’s what HUD 4000.1 has to say about the different types of FHA refinance loans now available: (Remember that not all participating lenders offer each and every type of FHA loan product, so if you | more...

October 14, 2015

Mortgage Rate Trends: Moving Lower To Start The Week

By Joe Wallace

Monday was a holiday, so no new mortgage rate information was published, but on Tuesday after the three-day weekend (for banks, federal offices and some businesses) mortgage loan rates began moving lower. The recovery, such as it was, wasn’t enough to push rates into a new best execution range or rates–borrowers in some cases may notice the difference in closing costs rather than an actual change in the rate. 30-year fixed rate conventional mortgages were reported at, best execution, 3.875% depending on the lender. Some more competitive lenders may be offering rates below that number at the time of this writing, but much depends on the borrower’s financial qualifications and other factors. FHA mortgage loan rates are holding at a best-execution 3.5%, though it’s too early to say whether this | more...

October 14, 2015

FHA Loan Mortgage Insurance Termination

By Joe Wallace

One commonly asked questions about FHA home loans involves when a borrower is permitted to terminate FHA-mandated mortgage insurance. There is a difference between FHA mortgage insurance premiums and private mortgage insurance–borrowers with questions about private mortgage insurance will need to contact the insurance provider. But for FHA mortgage insurance, there are rules in HUD 4000.1 that govern when such the coverage may be cancelled. These rules are found in Section III Part A, which includes the following: “A Mortgage Insurance Termination is the ending of FHA Single Family mortgage insurance at which time the Mortgagees obligation to remit MIP to HUD ends. Upon termination, the Borrower and Mortgagee will enjoy only those rights, if any, to which they would be entitled under the National Housing Act if the insurance | more...

October 13, 2015

FHA Loan Credit Questions: Delinquent Rent Payments

By Joe Wallace

A reader asked us a question in the comments section recently about FHA loan applications and missed payments. “I have let family members rent 2 apartments in my name and they left them early which left me with the bill–will that keep me from qualifying for a FHA loan?” The answer to this question depends on several things. Was this simply a case of breaking a lease? If so, was the rent paid on time before the lease was broken? If there are late or missing payments, that could be an issue depending on circumstances, the lender, and whether the payment issue was ever resolved. Any debt in the borrower’s name would be examined by the lender, even if it was to help out another family member. Co-signing is also | more...

October 12, 2015

In Observance of Columbus Day

By Joe Wallace

Banks and bond markets are closed in observance of the Columbus Day federal holiday, and we pause our usual coverage of FHA loan topics for today. We’ll resume our usual coverage, answer reader questions and address new FHA loan regulation issues tomorrow, including an update on FHA mortgage loan rate trends once the market has closed for the day. Thanks for reading and we’ll see you tomorrow!

October 10, 2015

Mortgage Rate Trends: Ending The Week Holding Steady After Upward Movement

By Joe Wallace

Mortgage rates closed out a week of upward movement with a hold-steady day on Friday. The three-day bank holiday weekend had rates staying still as bond market activity drew to a close in anticipation of the short trading week to come, so 30-year fixed rate mortgages are basically at 3.875% best execution, though our sources report some lenders may offer extremely well-qualified applicants something closer to 3.75% (best execution). FHA mortgage rates ended the week at 3.5% best execution. It’s far too early to tell whether this might be a new “comfort zone” for FHA rates–the last one was 3.75% and that held out for a long time–but if upward pressure continues on rates, it’s likely we’ll see that number fade away in favor of that previous 3.75%. But next | 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 9, 2015

Mortgage Rate Trends: Moving Higher

By Joe Wallace

It’s been a harder week for rates–last week we saw improvement on a daily or near-daily basis. This week, the opposite was true. On Thursday rates climbed higher, pushing 30-year fixed rate conventional mortgage loan interest rates out of their previous best-execution range (between 3.75% and 3.875%, depending on the lender and other factors) into a single, higher rate (3.875% best execution). FHA mortgage rates are still being reported at a best execution 3.5%, though if the upward trend persists, we’ll likely see that break out into a range of rates with 3.5% at the bottom end. If upward pressure continues over the short term, that range could consolidate into a higher best-execution rate. FHA rates have in the past tended to find a “comfort zone” and remain there, but | more...

October 8, 2015

HUD Charges Pennsylvania Landlord With Discrimination Against Children

By Joe Wallace

In a press release on the FHA/HUD official site, you’ll find the following statement about Fair Housing laws: “The Fair Housing Actmakes it unlawful to deny housing because a family has children under the age of 18 and to make statements that discriminate against families with children. Housing may exclude families with children only if it qualifies as housing for older persons under the Act. The Fair Housing Act permits the familynot the landlordto decide what unit is appropriate or safe for them.” This is mentioned in connection with a case brought by HUD against a Pennsylvania landlord. In a press release (HUDNo.15-123) published recently, we learn, “The U.S. Department of Housing and Urban Development (HUD) announced today that it has charged a Pennsylvania landlord with housing discrimination for allegedly | more...