Articles Published in: November 2015

November 23, 2015

Mortgage Rate News: Slightly Lower To Unchanged

Mortgage rates moved to fourteen day lows on Thursday of last week, and overall there seems to be some back-and forth (if Friday’s strong start and weakness later in the day is any indication) keeping rates about where they’ve been since the initial push higher. We saw six days of upward movement, followed by some relief, and now a few attempts to recover the lost ground. 30 year fixed rate conventional mortgages seem to be waffling between 4.0 and 4.125% best execution (depending on the lender). The last two days of improvement would likely have borrowers seeing the difference in closing costs rather than an actual movement of rates; this is typical. FHA mortgages remain in what appears to be a new comfort zone of 3.75% best execution. Keep in | more...

November 20, 2015

FHA Minimum Property Requirements in HUD 4000.1: Remaining Economic Life Of The Home

By Joe Wallace

HUD 4000.1 has a section with guidelines concerning the minimum property standards for homes to be purchased with an FHA mortgage. There are instructions to the lender concerning issues such as encroachments, overhead power lines, safety and related issues. HUD 4000.1 has specific language that requires certain aspects of the home be functional for the life of the loan. “The Mortgagee must confirm that the Structure of the Property will be serviceable for the life of the Mortgage. The Mortgagee must confirm that all foundations will be serviceable for the life of the Mortgage and adequate to withstand all normal loads imposed.” There is also a section that addresses FHA minimum standards for the remaining economic life of the property. These requirements exist to protect the investment made in the | more...

November 20, 2015

Agreement Reached In Michigan Housing Discrimination Case

By Joe Wallace

The FHA/HUD official site has issued a press release announcing an agreement in a Michigan housing discrimination case. According to HUDNo.15-147, a “concilliation agreement” has been reached between the government and Mortgage One, Inc., of Sterling Heights, Michigan, “resolving allegations of lending discrimination againstan applicant with disabilities.” According to the press release, HUD claimed Mortgage One and a loan officer, “required the mortgage applicant to provide intrusive and unnecessary documentation regarding his disabilities before approving his FHA-insured mortgage”. A persons qualifications to purchase a home should be the only criteria used to evaluate his or her loan application, not whether they are living with a disability, said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity, who was quoted in the press release. He adds, This agreement reaffirms | more...

November 19, 2015

FHA Loan Appraisal Standards: Environmental Concerns

By Joe Wallace

We’ve been reviewing appraisal standards and minimum property requirements as listed in the new HUD single family FHA loan rulebook, HUD 4000.1. One important section concerns environmental standards for any home purchased with an FHA mortgage. In general the lender is responsible for insuring that homes purchased with FHA loans are, “free of all known environmental and safety hazards and adverse conditions that may affect the health and safety of the occupants, the Propertys ability to serve as collateral, and the structural soundness of the improvements.” The lender cannot approve homes for FHA mortgages, for example, when power lines cross over certain water-based features of the home such as swimming pools. The existence of high pressure gas pipelines may also be a problem depending on the nature and location of | more...

November 19, 2015

Mortgage Rate Trends: Unchanged To Slightly Higher

By Joe Wallace

All eyes were on the Fed on Wednesday in anticipation of the release of Fed meeting minutes many hoped would give a bit more clarification to the possible December interest rate hike that’s been discussed. After the release of those minutes, mortgage rate behavior only changed a small amount, leaving best execution rates more or less where they have been in the last few days. Is a rate hike coming in December? That has not been confirmed (the Fed is definitely pointing towards the possibility), but many sources believe that interest rates for mortgage loans probably won’t take any steep plunges before that issue is cleared up. We’re likely staring at a tight range of rates until that happens. Some feel there is still potential for rates to move lower | more...

When Is An FHA Loan Better Than A Conventional Loan?

November 18, 2015

HUD 4000.1 Minimum Property Standards: Encroachment, Power Lines, Property Access

By Joe Wallace

The FHA loan rules in HUD 4000.1 include plenty of updates, changes, revisions, and restatements of FHA loan policy. The FHA didn’t provide a comparison from the old rules (HUD 4155.1 and HUD 4155.2) and the new, stating it was up to the end user to be aware of the new policies found in HUD 4000.1. That’s why we’re taking a look at some of the crucial areas of the FHA loan rules–to get a closer look at today’s rules and how they might affect your FHA loan transaction. FHA Minimum Property Requirements (MPRs) are a big part of the appraisal process as these requirements inform the appraiser’s work. We begin our examination of FHA MPRs with a look at a few of the basics. Encroachment HUD 4000.1 says, “The | more...

What you should know about FHA 203(h) Loans For Disaster Victims

November 18, 2015

FHA Appraisal Rules In HUD 4000.1: The Living Unit, Structural Conditions

By Joe Wallace

The FHA loan rules for minimum property standards in HUD 4000.1 include a section describing general requirements for “the living unit”. These instructions would be considered by the appraiser in addition to, but in replacement of, state and/or local building code. According to HUD 4000.1, “The Mortgagee must confirm that each living unit contains: –a continuing and sufficient supply of safe and potable water under adequate pressure and of appropriate quality for all household uses; –sanitary facilities and a safe method of sewage disposal. Every living unit must have at least one bathroom, which must include, at a minimum, a water closet, lavatory, and a bathtub or shower; –adequate space for healthful and comfortable living conditions; heating adequate for healthful and comfortable living conditions; –domestic hot water; and –electricity adequate | more...

November 17, 2015

FHA Loan Minimum Property Standards In HUD 4000.1

By Joe Wallace

The FHA home loan rules published in HUD 4000.1 include a set of minimum property standards that a home purchased with an FHA mortgage must live up to. The FHA appraisal is the process used to determine whether a property meets these minimum standards, also known as MPRs (Minimum Property Requirements) and MPS (Minimum Property Standards). According the HUD 4000.1: “As the on-site representative for the Mortgagee, the Appraiser provides preliminary verification that a Property meets the Property Acceptability Criteria, which includes HUDs Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). Minimum Property Requirements refer to general requirements that all homes insured by FHA be safe, sound, and secure.” HUD 4000.1 defines MPS as, “regulatory requirements relating to the safety, soundness and security of New Construction. When examination of | more...

November 17, 2015

Mortgage Rate Trends: Slightly Lower On Monday

By Joe Wallace

Monday was the fourth day that mortgage loan rates didn’t move higher–and after six solid days previously of upward movement, that’s a welcome development. We’re seeing what appears to be a cautious, gradual move lower after that sustained upward pressure. How long that move lower might continue isn’t clear, but we are seeing rates move rather than simply maintain the previous day’s position. 30-year fixed rate conventional mortgage loans are closer to 4.0% (best execution) than they have been in many days. Some lenders may still be offering best execution rates closer to 4.125%, but if the downward trend persists we may see many more lenders headed towards the rock bottom end of the four percent range. FHA mortgage loan rates are still at 3.75%, best execution. You may see | more...

November 16, 2015

Temporary FHA Guidance Eases Condo Project Approval Requirements

By Bruce Reichstein

The FHA has issued a press release announcing temporary guidance that will make it easier to get a condo project added to the approved list for an FHA mortgage loan. According to HUDNo.15-145, the FHA/HUD, “published new guidelines under its condominium approval process intended to increase affordable housing options for first-time and low- to moderate-income homebuyers. Effective immediately, FHAs temporary guidance will streamline the agencys condominium recertification process and expand the eligibility of acceptable owner-occupied units to include second homes that are not investor-owned.” These new guidelines, the FHA press release says, will be in effect for one year, and will “serve to revise FHAs condominium approval process until the agency can implement a more comprehensive condominium rule change.” The new guidance, issued on the FHA/HUD official site on November | more...