Articles Tagged With: Home Equity Conversion Mortgages

February 17, 2012

FHA Loan Reader Question: Bankruptcy and Job Loss

A reader recently sent us a lengthy comment as part of a request for assistance on FHA loan topics. He writes, “I had a foreclosure in a bk chap 7 that was discharged in Nov 2009. This was due to a job lost in 2008 like most of the country. I had to get unemployment for I went over one year looking for another job. I went back to work full time in Dec 2009…” We won’t reproduce the entire correspondence here, but we thought it important to address the issues mentioned above as there are plenty of other readers who may be facing similar circumstances. Is it possible to get a new FHA home loan with conditions like the ones previously mentioned as part of the borrower’s history? Let’s | more...

December 13, 2011

FHA and HUD Information In Spanish

By Joe Wallace

The FHA and HUD offer a wide range of information, advice, and news about FHA insured home loan programs. Part of that information includes FHA/HUD resources in Spanish. Did you know there’s an entire Spanish-language site dedicated to the same information provided in English? The Spanish language version of these pages is available at http://espanol.hud.gov/home.html and features information about buying vs. renting, home economics, FHA loan advice and other valuable resources. For those who have already purchased homes with an FHA mortgage, there are resources including topics on FHA/HUD refunds and “refund tracers,” refinancing options, foreclosure avoidance and other important details. When it comes to foreclosure avoidance advice, borrowers in trouble on their FHA loans in need of Spanish-language resources should see the page titled, “Gu

June 30, 2011

FHA Refinancing And Ownership Issues

By Joe Wallace

Real estate can be a confusing business for those not used to dealing with the daily ins and outs of the industry. But a first-time FHA borrower isn’t the only one likely to have some initial trouble navigating the rules and regulations covering real estate transactions, FHA loan requirements and other issues. A first-time applicant for refinancing also has plenty of questions about the process. One of the most frequently asked questions about refinancing involves an important ownership issue. Suppose a borrower purchased a home with an FHA insured loan, and either had the loan assumed, added someone to the title, or otherwise brought another person into property ownership without having them named on the original FHA loan? Can someone apply for an FHA refinancing loan if they own the | more...

June 28, 2011

The Different Types of FHA Home Loans

By Joe Wallace

There are many different types of FHA insured home loans to choose from. Buying a home or refinancing one isn’t a one-size-fits-all process, and FHA guaranteed loans come in a variety of types to accommodate the various needs different house hunters or current home owners bring to the lender. The two most basic types of FHA home loans are new purchase loans and refinancing loans. New purchase FHA loans, by name alone, may seem to indicate that these loans are intended only for new construction houses, but new purchase simply refers to the type of transaction (a “new to you” home purchase), not the age or condition of the property itself. FHA refinancing is, as the name implies, a home loan intended to pay off an old home loan and | more...

June 15, 2011

Types of Reverse Mortgages

By Joe Wallace

Federal law, including FHA regulations and requirements, govern how loans and many real estate services may be advertised or marketed to the consumer. But in spite of these laws, some companies choose to include misleading or intentionally vague wording about some loan products that may seem to imply that company is endorsed by the government or that the services offered are somehow in connection with the FHA or HUD. For example, not all reverse mortgages are FHA Home Equity Conversion Mortgages or HECM loans. But it would be very easy for a company to describe something very similar to an FHA HECM or reverse mortgage and allow the public to draw their own conclusions–however true or false–about whether that program is FHA approved. There are three basic types of reverse | more...

June 9, 2011

FHA Loans and Housing Counselor Services

By Joe Wallace

One of the most important things a new house hunter should know about FHA home loans is that they don’t have to work through the complex process of applying for a loan, finding a home, or closing the deal on their own. The FHA knows the position first-time home buyers are in and offers plenty of advice and assistance. Did you know the FHA makes referrals to agency-approved counselors? According to the FHA official site, you can get advice on buying a home, credit, the cost of buying versus renting and much more. You can even ask for a counselor referral for foreclosure avoidance issues and refinancing topics. The Department of Housing and Urban Development sponsors housing counseling agencies all over the United States so that counseling can be provided | more...

June 7, 2011

FHA Reverse Mortgage Loan Counseling Rules

By Joe Wallace

FHA Reverse Mortgages, also known as Home Equity Conversion Mortgages, have unique requirements because of the nature of the loan. HECM loans, which are intended for seniors age 62 and older, require no mortgage payments during the lifetime of the loan. HECM loans are paid off when the borrower dies or chooses to sell the property secured with the reverse mortgage. FHA rules state all HECM applicants must receive counseling to insure they are informed borrowers, fully aware of the responsibilities and requirements of a HECM loan as well as the benefits. This counseling must happen before the borrower commits to a reverse mortgage. According to Section 255(d) of the National Housing Act and FHA regulations found in 24 CFR 206.41, “all prospective Home Equity Conversion Mortgages (HECM) borrowers must | more...

May 24, 2011

FHA HECM Loans and Fees For Required Counseling

By Joe Wallace

An FHA Home Equity Conversion Mortgage or HECM loan lets qualified borrowers age 62 or older get a loan on their home which is not paid back in any way until the borrower dies or sells the property. Borrowers can get a line of credit or cash payments (or combinations of the two) depending on how the loan is set up. There are specific rules and requirements for HECM loans, and borrowers must get mandatory HECM loan counseling through an FHA-approved agency before the loan will be approved. The FHA is strict about the counseling requirements–an informed borrower is able to make the right choices for their circumstances. But HECM counseling is not free, and the counseling agencies are not government entities. Because the borrower is required to pay a | more...

May 20, 2011

FHA Loans: Ineligible Properties For HECM Purchase Loans

By Joe Wallace

The FHA Home Equity Conversion Mortgage, also known as a reverse mortgage, is for borrowers age 62 or older who want to borrow against the equity built up in their homes. There are a variety of requirements for this unique FHA loan product which allows eligible borrowers to make no mortgage payments, collect cash against the equity in the home or get a line of credit. The loan is paid off when the borrower dies or sells the property. There is a variation of the HECM loan known as a HECM Purchase loan. According to the FHA, HECM Purchase Loans allow “seniors, age 62 or older, to purchase a new principal residence using loan proceeds from the reverse mortgage.” FHA HECM loan requirements include using the home as the primary | more...

April 28, 2011

FHA HECM Loans and Required Counseling Facts

By Joe Wallace

The FHA Reverse Mortgage program, also known as a Home Equity Conversion Mortgage, is a type of loan product available to borrowers age 62 and older and with sufficient equity built up in the property. The reverse mortgage program offered by the FHA has terms that include no monthly payments. The HECM is paid off when the owner dies or sells the property. The borrower gets the proceeds from the HECM loan dispensed according to the loan agreement, which can include a line of credit, installment payments or a combination of the two. Because of the unique nature of an FHA HECM loan compared to other mortgage loans, the FHA requires the applicant to get loan counseling before the loan may be approved. The FHA wants borrowers to be fully | more...