March 17, 2017
A reader asks a question in our comments section this week about FHA condo loans. “My husbands ex-wife failed to pay their condo dues and they foreclosed on the property (Not the bank.. the Condo Association). The property was deeded to a 3rd party by the court. The FHA Loan is still in my husbands name with no rights to the title.”
“The property is being used as a rental and the bank will not ‘make’ them refinance the loan. They currently have been 2 months behind and continue to mark up his credit. No one seems to care Thoughts? Anything in the FHA Guidelines that addresses this?”
Borrowers who find themselves in legal entanglements associated with FHA home loans or FHA condo loans should seek legal counsel. The advice of a trained, qualified expert in real estate law, including any applicable laws of the state that might affect such a case, is very important. Legal advice is outside the scope of this blog, so we can’t address the legal question posed here. We aren’t lawyers, and aren’t qualified to dispense legal advice.
What we CAN address is whether or not FHA loan rules themselves offer any instructions in such circumstances. Unfortunately, a review of HUD 4000.1 did not turn up any references that might be applicable. This reader question is best answered by a legal expert.
At this point you may well ask why we bothered to run this reader question in the first place-if you can’t answer the question, why invest the time writing about it? The fact is, many readers could find themselves in need of the same information and knowing you should turn to a lawyer in such cases can save a great deal of time and effort. But there’s another factor that prompts us to write about this issue.
Borrowers should know that FHA home loans are regulated by rules set up by the FHA and HUD, but these rules are NOT the only ones that apply to an FHA loan transaction. There are local ordinances which must be followed, building code, state law, and even federal guidelines that all have a say in how such a transaction can be carried out.
Some borrowers might believe that the FHA single family loan rule book, HUD 4000.1, has the final say in all matters related to an FHA mortgage. This is not true. Even things as simple as what credit score you need to qualify for the loan, or what the requirements for projects to be approved for FHA condo loans require attention to applicable state or local laws.
When in doubt, it’s best to consult with the local authority, a real estate agent, or a loan officer to see what precedents have been set in the past that address the relevant FHA loan issue you’re concerned with that may be affected by additional regulations or guidelines outside HUD 4000.1.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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