April 4, 2013
FHA loans require paperwork. Whether it’s filled out on line, on paper, or using some combination of the two, there are several ares where borrower and lender must work together to complete.
You’ll notice when filling out your FHA loan paperwork that there are requirements for certain types of information including credit history, your monthly financial obligations and much more. But did you know there are rules that govern how this information is handled by the lender?
For example, one of the most important rules designed for the protection of the borrower applies to how the lender collects your signature and authorization for various steps of the FHA loan or refinance loan application process.
The FHA loan rules spelled out in HUD 4155.1 state:
“Lenders may not have borrowers sign
• documents in blank
• incomplete documents, or
• blank sheets of paper.”
If you are ever asked to sign such documents, it’s imperative to avoid giving that signature until you have had a chance to discuss the matter with an FHA representative. FHA rules expressly forbid this as stated above, quoted from HUD 4155.1 Chapter One Section B.
Conversely, the lender must never accept certain types of information directly from the borrower. Chapter One Section B states, “Lenders may not accept or use documents relating to the credit, employment, or income of borrowers that have been handled by, or transmitted from or through the equipment of interested third parties, such as
• real estate agents
• builders, or
• sellers.”
These rules are put in place to protect both borrower and lender. If you encounter a situation you suspect may not be keeping with the rules mentioned above, contact the FHA immediately at 1-800 CALL FHA for assistance.
Do you have questions about FHA home loans? Ask us in the comments section.
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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