Articles Tagged With: Foreclosure Avoidance

July 27, 2017

How FHA Loan Modification Works

In our previous blog post, we discussed some of the basics of FHA foreclosure avoidance and loan modification. But how does FHA loan modification work? FHA HAMP, also known as the FHA Home Affordable Modification program is a way for home owners to avoid foreclosure through a permanent loan modification. But in order to become eligible for FHA HAMP, borrowers have to meet certain criteria as described on the FHA/HUD official site. Who is eligible to apply for FHA HAMP? “Mortgagors with FHA-insured mortgages that do not qualify for other loss mitigation programs and with adequate debt-to-income ratios. Homeowners must successfully complete a trial payment plan before becoming a full participant in the program.” The trial payment plan is the key to the success of the borrower’s involvement with HAMP. | more...

August 30, 2016

FHA Announces Changes To Help Delinquent Borrowers Avoid Foreclosure

By Joe Wallace

The FHA has issued a press release announcing changes to its loss mitigation program guidelines to help borrowers avoid foreclosure and remain in their homes in times of financial difficulty. According to HUDNo.16-127, “The Federal Housing Administration (FHA) today announced new procedures to strengthen the process mortgage servicers use to help struggling families avoid foreclosure and remain in their homes. FHA is streamlining its loss mitigation protocols that servicers must use when evaluating and deploying home retention options, foreclosure alternatives that allow delinquent borrowers to retain their home.” By way of background, the FHA official site (in Mortgagee Letter 2016-14) explains, “The evolution of FHAs loss mitigation guidance has also led to improved consumer engagement, the streamlining of FHAs Pre-Foreclosure Sale option, and a new loan modification by which Mortgagees | more...

February 11, 2016

FHA/HUD Alter FHA Loan Foreclosure Timeline Rules

By Joe Wallace

There have been many changes to FHA/HUD foreclosure policy. The latest of those changes comes via FHA Mortgagee Letter 2016-04, which adjusts the foreclosure timeline to comply with federal regulations known as Regulation X. According to the mortgagee letter, a previous mortgagee letter (2015-21) has been superseded in its entirety by this new set of guidelines. The new mortgagee letter “…provides updated guidance relating to HUDs regulatory requirement for mortgagees to utilize a loss mitigation option or initiate foreclosure within six months of the date of default. Specifically, this Mortgagee Letter: –reiterates the existing eight automatic extensions available to mortgagees when they are unable to initiate foreclosure within the allotted timeframe; and –introduces two new automatic extensions to align with the Consumer Financial Protection Bureaus Regulation X.” Specifically, “The Consumer | more...

January 15, 2016

HUD Charges Three Foreclosure Rescue Companies With Fraud, Discrimination

By Joe Wallace

HUD is bringing charges against three California foreclosure relief/loan modification companies according to a press release issued on the HUD official site. According to HUDNo.16-002, the agency is bringing charges against, “…three Modesto, California, home loan modification companies and nine of their agents with violating the Fair Housing Act by targeting Hispanic homeowners” for their national origin. As mentioned in the press release, laws passed as part of the Fair Housing Act prohibit discrimination in housing transactions (to include rental properties, public housing, and mortgage loans” because of national origin. “Families struggling to stay in their homes need real help, not false promises that make a bad situation worse,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity, who was quoted in the press release. He adds, | more...

November 30, 2015

FHA Loans After A Deed-In-Lieu Of Foreclosure

By Joe Wallace

A reader question came in recently asking about the possibility of getting an FHA home loan following a deed-in-lieu of foreclosure (DIL) action. “Is a deed-in-lieu derogatory on a credit report?” was one of the questions. The answer to that is that yes, a deed-in-lieu is considered a negative on your credit report. But FHA loans do offer some hope for borrowers who have since the deed-in-lieu established good credit once more. FHA loan rules in HUD 4000.1 cover the requirements in these circumstances for single-family “forward mortgages” after a deed-in-lieu of foreclosure, and those rules include mandatory waiting times or “seasoning periods” following the DIL. When can a borrower apply for a new FHA home loan after a deed-in-lieu? According to HUD 4000.1: “A Borrower is generally not eligible | more...

April 28, 2015

FHA Loan Program Changes To Help Prevent Foreclosure

By Joe Wallace

On Friday, April 24 2015, the FHA and HUD issued a press release detailing “significant changes” to the Distressed Asset Stabilization Program or DASP. According to HUDNo 15-048, “In an effort to better serve homeowners looking to avoid foreclosure, loan servicers will now be required to delay foreclosure for a year and to evaluate all borrowers for the Home Affordable Modification Program (HAMP) or a similar loss mitigation program.” “HUD is making additional improvements to the Neighborhood Stabilization Outcome (NSO) sales portion of DASP which are aimed at increasing non-profit participation. Updates include giving non-profits a first look at vacant properties, allowing purchasers to re-sell notes to non-profits, and offering a non-profit only pool.” That is a major alteration from the old standard, which permitted lenders to foreclose on a | more...

April 15, 2015

Revised FHA Loan Housing Counseling Rules Now In Effect

By Joe Wallace

In our last post, we discussed the HUD press release announcing funding for housing counseling services across the country. Earlier this month, new FHA loan rules took effect which affect a lender’s responsibility to inform borrowers of housing counseling services. The services affected by the new FHA loan rules are intended for those who are at risk of foreclosure on FHA mortgages. According to FHA Mortgagee Letter 2015-04, lenders are required to: “…provide delinquent borrowers with a notice describing the availability of housing counseling offered by HUD-approved housing counseling agencies and by the mortgagee. Mortgagees are currently required to prepare such a notice that provides the information required by FHA.” The lender is required to Mortgagees give affected borrowers all the information included in an FHA/HUD publication titled, “Notification to | more...

July 14, 2014

FHA and HUD Update Deed-In-Lieu and Pre-Foreclosure Sale Rules

By Joe Wallace

The FHA and HUD have issued a Mortgagee Letter updating the requirements for Deed-In-Lieu and Pre-Foreclosure sales for borrowers at risk of going into default on FHA home loans. Mortgagee Letter 2014-15, Updated Requirements for Pre-Foreclosure Sales (PFS) and Deeds in Lieu (DIL) of Foreclosure, completely updates and supersedes the previous FHA mortgagee letter in these areas. The new regulations could in some cases be implemented right away if participating lenders choose to do so, but FHA/HUD requirements state these rules will be in effect for all lenders as of October 1, 2014. The new guidelines include alterations or modifications of existing policy including the following as listed in the mortgagee letter: –Requirements for real estate agents and brokers participating in PFS transactions; –An initial listing period requirement for PFS | more...

December 5, 2012

New Hampshire Gets FHA/HUD Hurricane Sandy Relief

By Joe Wallace

New Hampshire is the latest state to receive FHA/HUD relief in the wake of Hurricane Sandy. On Monday, December 3 2012, the FHA and HUD issued a press release announcing foreclosure relief, FHA loans and refinancing plus other help for those recovering from storm damage. According to HUDNo.12-184, “U.S. Housing and Urban Development Secretary Shaun Donovan today announced HUD will speed federal disaster assistance to the State of New Hampshire in addition to resources being provided by FEMA and other federal partners. HUD will provide support to homeowners and low-income renters forced from their homes due to Hurricane Sandy.” Some may wonder why at takes time for all areas to get such disaster assistance from the FHA and HUD. The answer is simple–these benefits become available once an affected region | more...

December 4, 2012

FHA Loan Rules For Maximum Loan Amounts

By Joe Wallace

Borrowers new to the FHA loan program naturally want to know how much they may be permitted to borrow with an FHA guaranteed mortgage loan. While there is no single, fixed dollar amount maximum for the FHA loan program in general, there are rules and guidelines that govern how much a qualified borrower can get. The FHA loan rules are described in a publication called HUD 4155.1, which includes the following in FHA loan limits: “The statutory provisions of the National Housing Act establish the maximum loan limits and mortgage amounts for all FHA mortgage insurance programs. Maximum loan limits vary depending upon the • specific program under which a loan is insured • number of dwelling units in the property (one to four units), and • geographic location of | more...