FHA loans; why not?

[UCGal]

[quote=scaredycat]are most americans actually thinking about their loans?[/quote]

Probably not.
And look at the mess we’ve gotten into.

heck – most home buyers only look at what size payment they can afford… and don’t look at the underlying loan product being offered. That’s how we got so much creative financing with neg am loans etc…

If people bought homes with the idea of paying them off – there would be a very different economy right now. I don’t know how many people told me I was stupid for getting a 15 year loan. But I’m going to be mortgage free in my retirement, and they won’t be.

[scaredyclassic]

the next 15 years will probably be very different from the last 15 years.

[scaredyclassic]

the next 15 years will probably be very different from the last 15 years.

[scaredyclassic]

the next 15 years will probably be very different from the last 15 years.

[scaredyclassic]

the next 15 years will probably be very different from the last 15 years.

[scaredyclassic]

the next 15 years will probably be very different from the last 15 years.

[ugsfugs]

The MIP can be removed on 15+ year loans after a full five years. However, it is not based on a new appraisal amount. The HUD website says in several places a new appraisal will not be considered. The 78% calculation is based on the lower of the purchase price or appraised value at the time of purchase. So you actually have to pay down the principal to 78%. The calculation is not based on whether the market goes up or down.

Also, I have seen references to refundable MIP on the HUD website. However, I have not looked into/researched what that means. My gut thought (could be off) was that if you can remove the MIP after 5 years you HUD may owe you some of the 1.75% they added to the loan in the first place. Perhaps this is true if you refi too. Will let you know if I gain anymore insight there.

[ugsfugs]

The MIP can be removed on 15+ year loans after a full five years. However, it is not based on a new appraisal amount. The HUD website says in several places a new appraisal will not be considered. The 78% calculation is based on the lower of the purchase price or appraised value at the time of purchase. So you actually have to pay down the principal to 78%. The calculation is not based on whether the market goes up or down.

Also, I have seen references to refundable MIP on the HUD website. However, I have not looked into/researched what that means. My gut thought (could be off) was that if you can remove the MIP after 5 years you HUD may owe you some of the 1.75% they added to the loan in the first place. Perhaps this is true if you refi too. Will let you know if I gain anymore insight there.

[ugsfugs]

The MIP can be removed on 15+ year loans after a full five years. However, it is not based on a new appraisal amount. The HUD website says in several places a new appraisal will not be considered. The 78% calculation is based on the lower of the purchase price or appraised value at the time of purchase. So you actually have to pay down the principal to 78%. The calculation is not based on whether the market goes up or down.

Also, I have seen references to refundable MIP on the HUD website. However, I have not looked into/researched what that means. My gut thought (could be off) was that if you can remove the MIP after 5 years you HUD may owe you some of the 1.75% they added to the loan in the first place. Perhaps this is true if you refi too. Will let you know if I gain anymore insight there.

[ugsfugs]

The MIP can be removed on 15+ year loans after a full five years. However, it is not based on a new appraisal amount. The HUD website says in several places a new appraisal will not be considered. The 78% calculation is based on the lower of the purchase price or appraised value at the time of purchase. So you actually have to pay down the principal to 78%. The calculation is not based on whether the market goes up or down.

Also, I have seen references to refundable MIP on the HUD website. However, I have not looked into/researched what that means. My gut thought (could be off) was that if you can remove the MIP after 5 years you HUD may owe you some of the 1.75% they added to the loan in the first place. Perhaps this is true if you refi too. Will let you know if I gain anymore insight there.

[ugsfugs]

The MIP can be removed on 15+ year loans after a full five years. However, it is not based on a new appraisal amount. The HUD website says in several places a new appraisal will not be considered. The 78% calculation is based on the lower of the purchase price or appraised value at the time of purchase. So you actually have to pay down the principal to 78%. The calculation is not based on whether the market goes up or down.

Also, I have seen references to refundable MIP on the HUD website. However, I have not looked into/researched what that means. My gut thought (could be off) was that if you can remove the MIP after 5 years you HUD may owe you some of the 1.75% they added to the loan in the first place. Perhaps this is true if you refi too. Will let you know if I gain anymore insight there.

[ugsfugs]

I think this whole discussion may be flawed by the fact that a borrower may not be able to walk away from an FHA loan. Granted, it remains to be seen if/when/how the government will go after defaulting FHA borrowers, but I am becoming more and more confident that the U.S. government will have the right. I.e. see the snippets I pulled below.

“The antideficiency legislation is only a state law and is not binding on the federal government. Therefore, if the purchase-money obligation is federally funded or insured, the trustor remains personally liable for a deficiency judgment.”

U.S. v. Haddon Haciendas Co., 541 F.2d 777, 782 (9th Cir. 1976); U.S. v. Allgeyer, 466 F.2d 1195, 1196 (9th Cir. 1972); Branden v. Driver, 441 F.2d 1171 (9th Cir. 1971); U.S. v. Rossi, 342 F.2d 505, 506 (9th Cir. 1965); U.S. v. View Crest Garden Apts., Inc., 268 F.2d 380, 383 (9th Cir. 1959); McKnight v. U.S., 259 F.2d 540, 544 (9th Cir. 1958).

“Loans that are insured by the federal government under FHA and VA programs are subject to comprehensive regulations covering all aspects of the rights of the lender, borrower, and government in the event of a default and subsequent foreclosure. These regulations apply exclusively
to such loans and supplant any inconsistent state regulations on the subject. Therefore, purchase money obligations insured by either VA or FHA are not subject to the antideficiency provisions of Code Civ. Proc. § 580b, and the government may seek reimbursement from the borrower of any claims that it has paid under its loan guaranty agreement.”

United States v. Shimer (1961) 367 U.S. 374, 381, 81 S. Ct. 1554, 6 L. Ed. 2d 908. United States v. Allgeyer (9th Cir. 1972) 466 F.2d 1195, 1196 (FHA loans) ; United States v. Rossi (9th Cir. 1965) 342 F.2d 505, 506 (VA loans) .

[ugsfugs]

I think this whole discussion may be flawed by the fact that a borrower may not be able to walk away from an FHA loan. Granted, it remains to be seen if/when/how the government will go after defaulting FHA borrowers, but I am becoming more and more confident that the U.S. government will have the right. I.e. see the snippets I pulled below.

“The antideficiency legislation is only a state law and is not binding on the federal government. Therefore, if the purchase-money obligation is federally funded or insured, the trustor remains personally liable for a deficiency judgment.”

U.S. v. Haddon Haciendas Co., 541 F.2d 777, 782 (9th Cir. 1976); U.S. v. Allgeyer, 466 F.2d 1195, 1196 (9th Cir. 1972); Branden v. Driver, 441 F.2d 1171 (9th Cir. 1971); U.S. v. Rossi, 342 F.2d 505, 506 (9th Cir. 1965); U.S. v. View Crest Garden Apts., Inc., 268 F.2d 380, 383 (9th Cir. 1959); McKnight v. U.S., 259 F.2d 540, 544 (9th Cir. 1958).

“Loans that are insured by the federal government under FHA and VA programs are subject to comprehensive regulations covering all aspects of the rights of the lender, borrower, and government in the event of a default and subsequent foreclosure. These regulations apply exclusively
to such loans and supplant any inconsistent state regulations on the subject. Therefore, purchase money obligations insured by either VA or FHA are not subject to the antideficiency provisions of Code Civ. Proc. § 580b, and the government may seek reimbursement from the borrower of any claims that it has paid under its loan guaranty agreement.”

United States v. Shimer (1961) 367 U.S. 374, 381, 81 S. Ct. 1554, 6 L. Ed. 2d 908. United States v. Allgeyer (9th Cir. 1972) 466 F.2d 1195, 1196 (FHA loans) ; United States v. Rossi (9th Cir. 1965) 342 F.2d 505, 506 (VA loans) .

[ugsfugs]

I think this whole discussion may be flawed by the fact that a borrower may not be able to walk away from an FHA loan. Granted, it remains to be seen if/when/how the government will go after defaulting FHA borrowers, but I am becoming more and more confident that the U.S. government will have the right. I.e. see the snippets I pulled below.

“The antideficiency legislation is only a state law and is not binding on the federal government. Therefore, if the purchase-money obligation is federally funded or insured, the trustor remains personally liable for a deficiency judgment.”

U.S. v. Haddon Haciendas Co., 541 F.2d 777, 782 (9th Cir. 1976); U.S. v. Allgeyer, 466 F.2d 1195, 1196 (9th Cir. 1972); Branden v. Driver, 441 F.2d 1171 (9th Cir. 1971); U.S. v. Rossi, 342 F.2d 505, 506 (9th Cir. 1965); U.S. v. View Crest Garden Apts., Inc., 268 F.2d 380, 383 (9th Cir. 1959); McKnight v. U.S., 259 F.2d 540, 544 (9th Cir. 1958).

“Loans that are insured by the federal government under FHA and VA programs are subject to comprehensive regulations covering all aspects of the rights of the lender, borrower, and government in the event of a default and subsequent foreclosure. These regulations apply exclusively
to such loans and supplant any inconsistent state regulations on the subject. Therefore, purchase money obligations insured by either VA or FHA are not subject to the antideficiency provisions of Code Civ. Proc. § 580b, and the government may seek reimbursement from the borrower of any claims that it has paid under its loan guaranty agreement.”

United States v. Shimer (1961) 367 U.S. 374, 381, 81 S. Ct. 1554, 6 L. Ed. 2d 908. United States v. Allgeyer (9th Cir. 1972) 466 F.2d 1195, 1196 (FHA loans) ; United States v. Rossi (9th Cir. 1965) 342 F.2d 505, 506 (VA loans) .

[ugsfugs]

I think this whole discussion may be flawed by the fact that a borrower may not be able to walk away from an FHA loan. Granted, it remains to be seen if/when/how the government will go after defaulting FHA borrowers, but I am becoming more and more confident that the U.S. government will have the right. I.e. see the snippets I pulled below.

“The antideficiency legislation is only a state law and is not binding on the federal government. Therefore, if the purchase-money obligation is federally funded or insured, the trustor remains personally liable for a deficiency judgment.”

U.S. v. Haddon Haciendas Co., 541 F.2d 777, 782 (9th Cir. 1976); U.S. v. Allgeyer, 466 F.2d 1195, 1196 (9th Cir. 1972); Branden v. Driver, 441 F.2d 1171 (9th Cir. 1971); U.S. v. Rossi, 342 F.2d 505, 506 (9th Cir. 1965); U.S. v. View Crest Garden Apts., Inc., 268 F.2d 380, 383 (9th Cir. 1959); McKnight v. U.S., 259 F.2d 540, 544 (9th Cir. 1958).

“Loans that are insured by the federal government under FHA and VA programs are subject to comprehensive regulations covering all aspects of the rights of the lender, borrower, and government in the event of a default and subsequent foreclosure. These regulations apply exclusively
to such loans and supplant any inconsistent state regulations on the subject. Therefore, purchase money obligations insured by either VA or FHA are not subject to the antideficiency provisions of Code Civ. Proc. § 580b, and the government may seek reimbursement from the borrower of any claims that it has paid under its loan guaranty agreement.”

United States v. Shimer (1961) 367 U.S. 374, 381, 81 S. Ct. 1554, 6 L. Ed. 2d 908. United States v. Allgeyer (9th Cir. 1972) 466 F.2d 1195, 1196 (FHA loans) ; United States v. Rossi (9th Cir. 1965) 342 F.2d 505, 506 (VA loans) .

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