Articles Published in: May 2017

May 4, 2017

Mortgage Loan Interest Rate Trends: Up And Down

In our last report we noted that mortgage loan interest rate numbers could be influenced by the substance of the most recent Fed announcement, or more specifically investor reaction to those details. Rates did try to creep lower ahead of Wednesday’s Fed event, and Wednesday morning it seemed like rates were trying to move lower still. But the Fed came and went, rates began to move higher, and according to our sources at the end of the day on Wednesday we were right back to where things were at before the pre-Fed downward movement. Which is to say that rates have been moving up and down within a certain range without any real major, breaking news-type dramatic shifts. 30-year fixed rate mortgage loan interest rate numbers are in a best | more...

May 3, 2017

Commuting Distances and FHA Loans

By Joe Wallace

Do commuting distances affect your ability to get an FHA mortgage? A reader asks, “I work in New Jersey and have been employed with my company for over over 20 years. Since the type of work I do I can work from home I want to move to NC. I will still be employed with my job.” “The only stipulation with my job is I have to come to NJ for 6 weeks out of the year (not all at once) which I have no problem doing. Will I still be able to obtain an FHA loan?” FHA loan rules in HUD 4000.1 do address commuting distances, but not all circumstances can be anticipated with the rules. In many cases FHA loan rules defer to other regulations where appropriate. In | more...

Can I buy a manufactured home with an FHA loan?

May 3, 2017

Work Absences And FHA Loans

By Joe Wallace

Can FHA loans depend on a borrower not having medical leave or temporary absences from work? That’s what one reader wants to know this week: “I was out from work one month do to a job related injury. Can I get an FHA loan? How long I have to wait to qualify? I have been working for the same company three years.” FHA loan rules may be non-specific on certain types of circumstances, preferring to defer to state law, lender standards, or other guidelines. However, this situation is not one of those. HUD 4000.1 specifically addresses the issue of temporary absences from the applicant’s place of employment. HUD 4000.1 describes this as a “temporary reduction of income”, stating: “For Borrowers with a temporary reduction of income due to a short-term | more...

May 2, 2017

Cash To Close And Earnest Money: FHA Loan Rules

By Joe Wallace

All home loans have requirements for cash to close the deal, earnest money, and down payments. The FHA loan rules for these are found in HUD 4000.1, which has instructions to the lender on how to verify and process these payments. For example, on page 296 of HUD 4000.1, we learn the following: “The Mortgagee may only consider assets derived from acceptable sources in accordance with the requirements outlined below. Closing costs, prepaid items and other fees may not be applied towards the Borrowers Minimum Required Investment” also known as the down payment. Sources of cash to close and earnest money must be properly documented by the lender. FHA loan rules do not permit non-collateralized loans such as credit card cash advances or payday loans to be used for the | more...

May 2, 2017

HUD Extends 203(h) Disaster Relief For Louisiana Flood Victims

By Bruce Reichstein

The Department of Housing and Urban Development has announced an extension of certain disaster relief help for those in certain federal disaster areas in Louisiana. According to a mortgagee letter published on the HUD/FHA official site, HUD announces, “the additional period of eligibility” for Section 203(h) mortgages, which comes as an extension of “Federal Assistance for victims of the March 13, 2016 and August 14, 2016 Presidentially-Declared Major Disaster Areas of Louisiana”. According to the HUD official site, the 203(h) program period of eligibility “is extended for case numbers assigned on or before September 8, 2017” for the following Presidentially-Declared Major Disaster Areas: -Louisiana Severe Storms and Flooding (DR-4263) declared on March 13, 2016; and -Louisiana Severe Storms and Flooding (DR-4277) declared on August 14, 2016. Normally, such assistance is | more...

May 1, 2017

FHA Loan Questions: Verifying Alimony and Child Support

By Joe Wallace

FHA loan questions often come in our comments section after we’ve posted on a certain topic. Recently we wrote about how a lender is supposed to verify child support and alimony payments to a borrower who wants to use them as income: “I applied for a loan and my loan officer said I need proof of continuing payment for the next 3 yrs because my oldest son is 16 but will not graduate high school until after he turns 19. Would my court ordered support papers, my sons school records showing graduation year, and a copy of the law stating that he has to pay until he graduates be good enough proof?” FHA loan questions like these are proof that there’s still much work to do on explaining how FHA | more...

May 1, 2017

Mortgage Loan Interest Rate Trends: Holding Ahead Of Fed

By Joe Wallace

Since our last report, mortgage loan interest rate trends have held on to some of the improvement seen last week, closing out Friday more or less unchanged, depending on the lender. This week is a big one-there is a much anticipated announcement by the Fed on Wednesday that has potential to influence rates depending on investor reaction to that announcement. It is entirely possible we could see rates in a defensive mode leading up to the fed with few changes one way or the other. There’s also an important employment report due out on Friday that could further influence rates-again, depending on investor reaction to the news. These two events, their implications, and how investors deal with all of it could make for a tricky week. There’s also breaking news | more...