FHA Mortgage Guide

The first time I bought a home I financed with FHA financing. The broker told me how much cash I needed, I said great, and the deal was done.

The problem was I had no idea how FHA financing worked. Had the lender been something other than honest, they could have charged just about any rate and I would not have known any better.

Now there’s a new emphasis on counseling for first-time borrowers and I say great. Let’s tell borrowers how FHA loans work so they will not be surprised by insurance premiums and other costs. Let’s tell them the good news about prepayment penalties and the bad news about quirky pay-off requirements.

But why limit counseling to first-time borrowers? Most people only get a loan every eight to 10 years or so. Could not all borrowers benefit from a market update?

Sy Syms, the clothing retailer, used to say that an educated consumer was his best customer. Why shouldn’t that be true with lenders?

Just curious, that’s all.

Syndicated columnist Ken Harney reports that barriers remain to FHA reform.But whether there are or are not barriers, individual borrowers might want to ask if they will benefit should the new proposals pass in the Congress.
For instance, one idea is to change the FHA insurance premium system. Currently borrowers pay a 1.5 percent fee at closing […] read more

The American Financial Services Association (AFSA) says we may be headed for a credit crunch.
“The study, conducted by the Center for Statistical Research (CSR),finds that more restrictive mortgage regulation would deny credit not only to those who would actually experience a foreclosure, but also to the whole class of borrowers in a particular risk category […] read more

It appears that a lot of people are getting tired of new-fangled mortgages with strange terms and surprising costs.
The result? They’re turning to FHA loans.
FHA Commission Brian Montgomery says about 100,000 people will dump “nontraditional” loans and convert to FHA financing.
Is this a big deal? You bet.
First, FHA loans have tougher terms than a lot of recent mortgages – you have to document your income. No “stated income” loan applications allowed.
Second, you have […] read more

Some stories are just too good. KTVB, Channel 7 in Boise,  Idaho reports that a man facing foreclosure locked three pigs in his home with about the results one would expect. The pictures that go with the story tell all.

Wouldn’t it have been easier to try to work out something with the lender? If you’re […] read more

Sam Thompson, a blogger and North Carolina mortgage loan officer, makes the point that
“Congress is jumping on mortgage lenders for charging 12% interest rates while credit card companies are getting away with charging 28% with no signs of intervention!”
Let me say that, halfway, I agree.
Mortgages and credit cards are different. Mortgages are secured financing while […] read more

It wasn’t too long ago that the FHA mortgage program was just about dead. While some 1.5 million loans were originated under the FHA program in 2003, by 2005 loan volume was down to 555,000 mortgages.
But now there is new hope for the FHA financing. What’s really happened is that borrowers (and lenders) have shied […] read more