Fha Notice To Homeowner: Fill & Download for Free

Yes, and even the FBI were amused in the end.Too good to be true?Back in 1989, I was looking for a house to rent for my family. It wasn’t going well. Most homes in the price range I could pay were either in poor condition or in a bad neighborhood. I was chasing every lead, so when I saw a sign nailed to a telephone pole that offered “3 bedroom homes for rent - $450,” I called and left a message.The man who called me back introduced himself as “Jesse,” and he indicated that he had two vacant houses remaining. He gave me the addresses and said to call back if I was interested in either home. The first house was much like the others I had been seeing — marginal condition in a marginal neighborhood. The second house wasn’t at all like I expected. It was — AWESOME! It was in a good neighborhood. Looking through the windows, I actually counted four bedrooms, with a master bedroom that opened onto a deck, and it had a sun room! A FREAKIN’ SUN ROOM!Convinced he had given me the wrong address, I called back, and when he confirmed the address, I quickly told him I wanted to lease the house. He met me at the house, and he seemed to know almost nothing about it. He even seemed surprised that the house actually had four bedrooms. We signed the lease, and he took my first month’s rent and a deposit check for the same amount.Bad news!After a little more than a month of the high life in our new home, a trivial incident happened that was the first indication of trouble. The float in a toilet broke, but it was no big deal. I spent $10 replacing the part, and wanted to arrange to deduct the cost from the next month’s rent. I called and left a message for Jesse that I had something I wanted to talk to him about, but he didn’t call me back. I called back a week later to remind him that I needed to talk to him, but again he didn’t return the call. Hmmm ...It was a Sunday morning, a few weeks later, and I was leisurely lying on the sofa in MY SUN ROOM reading the local paper, when something caught my eye — a report of an emerging scam taking place across the country.As the story explained, because the economy had quickly slowed, home values had plummeted, and in many areas, homeowners owed much more on their mortgages than their homes were worth. Some homeowners, though, had a type of mortgage called an FHA “non-qualifying assumable” loan. This allowed a homeowner to sell their home to anyone, regardless of the buyer’s qualifications or ability to pay, with the buyer simply taking over the seller’s debt to the FHA. The article indicated that con men were buying large numbers of these houses, immediately renting them out, and collecting rent without making mortgage payments for as long as possible until the homes were foreclosed on.OMG!OMG!!OMG!!!The article went on to interview renters who had been told they had to leave the foreclosed houses, and some key things stood out: they had surprisingly low rent on nice homes (so the scammer could start the rent stream ASAP), and once they moved in, they could never get in touch with the landlord, despite multiple calls (!!!!!). Fuuuuudge!I asked a neighbor what he knew about the buyer and, sure enough, he told me that the previous owner owed over $100K on a house she was told she could sell for about $65K, but that a buyer agreed to take over her mortgage for the full amount.Last call:I was PISSED! The last thing I wanted to do was give this scammer another dollar. He had already taken my deposit and two months’ rent. I called the Austin Tenants Council and explained the situation. The friendly lawyer said that I had no proof and that I absolutely, under no circumstances, could stop paying rent.I remembered that he hadn’t called me back about the $10 toilet float, and that I had never told him why I had called. I decided to give him one last chance, and if he called me back, I would have to keep paying rent. I called him one last time, acting extremely angry and threatening, and waited.He never called back, and I never sent another check.Time’s up:About three months later, we got the first note on our door demanding that we “call the bank about your mortgage.” It had begun. The same thing happened for the next four months. During the fourth month, we found a notice posted on the door that the house was being foreclosed on, and that we had to vacate it in 60 days.In the end, we were in the house for just over nine months, for which we paid two months’ rent and lost the deposit. The scammer lost over $2500 just for not returning my call about a $10 toilet part.Agents at the door, and LOLs:About three years later, I was in my garage when my wife came in and said, “Mark, two guys from the FBI are here and they want to talk to you.”The agents introduced themselves and asked if we had lived at the address of the scam rental house. I said, “Yes, for nine months,” and they indicated that Jesse had been arrested crossing the border into Mexico. He had pulled the same scam on over 20 houses, and they were tasked with building the felony case against him for cheating the FHA. They said they would need a copy of my lease agreement and copies of all the rent checks.“Yeah, about that, I stopped paying after the second month.” They were incredulous, and when I explained that I quit paying because of the toilet piece and everything, they burst out laughing. I gave them the lease agreement and agreed to get copies of the few checks for them.Jesse later pled guilty and went to the pokey (ironically, the house is now worth $270K more than he paid for it. If he had just paid the mortgage and kept it, instead of making like a bandit, he could have made out like a bandit).Man, I loved that sun room!

Thank you for the A2A Daniel DudgeonI think people know, but do not internalize, the risk associated with having a debt related to property. As an answerer below pointed out, this even extends to never really owning your home—even a mortgage-free home can be taken if taxes are not paid. There are other circumstances where the government may take a home as well. These include eminent domain (taking the property for a governmental use). In these latter circumstances, the homeowner is paid the “fair market value.” Determining this is a war of the experts, and the government usually has more money for the legal battle (and expert witnesses).More commonly, homeowners do not appreciate the risks associated with having a mortgage. A late payment can set off a string of late fees that the bank lets accrue until the mortgage is counted as in arrears, triggering a foreclosure. The bank may illegally send no notice or send notice to the wrong address, leaving it to the homeowner to prove they did not receive it. Likewise, the bank may falsely allege there is no insurance (mandated by the mortgage document) in place. They may persist in this allegation all the way through winning a foreclosure case and having the home sold at auction and the homeowner evicted. They may persist in this despite the homeowner having proof that they (and their insurance agent) faxed, mailed (certified mail), and emailed proof of insurance in excess of twenty times. The bank may “force place” insurance that costs far more than typical homeowners insurance and add the cost to the mortgage payment, foreclosing if it isn’t paid. This force-placed insurance is usually obtained from the bank’s cronies and only protects the bank’s interest in the property—not that of the homeowner who is forced to pay—despite costing many times more than a typical homeowners insurance policy.Homeowners may feel protected insofar as insurance and taxes if they have an escrow feature associated with their loan. However, there is no guarantee the bank will follow through on paying insurance or taxes. They are as apt as not to neglect these duties, themselves creating the “no insurance” scenario above. Worse, they may neglect paying property taxes, causing loss of the home.Owning even a simple single-family home requires vigilance. The world is full of schemes to taker property.I blog about housing related issues at Kelli Dudley and my book discusses many of the problems above. The book is FREE to read on Kindle Unlimited: Iniquity: How court systems, attorneys, and legal aid organizations cheated homeowners in foreclosure - Kindle edition by Kelli Dudley. Professional & Technical Kindle eBooks @ Amazon.com. Several Medium articles refer to foreclosure and defense or cautions when buying a home, including Foreclosures are Neither Indefensible Nor Unavoidable and 10 Things I Would have Done Differently when I Bought my First House if I had Known about the FHA

A short sale—also known as a preforeclosure sale—is one of several “adverse credit events” that require a waiting period before being qualified for another mortgage.A homeowner who sold their home for less than the mortgage balance would be subject to the following seasoning requirements:Conventional loan: 4 yearsVA loan: 2 yearsFHA loan: 3 yearsThere may be extenuating circumstances which can shorten the seasoning requirements. Although the criteria for these were once somewhat nebulous, they are now considered to be any one-time events that reduced the borrower’s income or increase in financial obligation. Among these areJob lossPay cutSerious illness resulting in job loss or cut in hoursFHA says that the borrower’s income must have been cut by at least 20% for six months or more. Conventional programs can consider divorce as an extenuating circumstance, but FHA and VA don’t.As long as we’re talking about seasoning after short sale, we might as well cover seasoning after other adverse credit events as well.ForeclosureConventional: 7 years (3 years with extenuating circumstances)VA: 2 years (1–2 years with extenuating circumstances)FHA: 3 years (1 year with extenuating circumstances)Bankruptcy (Chapter 7Conventional: 4 years (2 years with extenuating circumstances)VA: 2 years (1–2 years with extenuating circumstances)FHA: 2 years (1 year with extenuating circumstances)Bankruptcy (Chapter 13Conventional: 2 years (Same with extenuating circumstances)VA: 1 year (Same with extenuating circumstances)FHA: 1 year (Same with extenuating circumstances)Cured Default. This means that the lender on a previous property had filed a Notice of Default to begin foreclosure proceedings, but the borrower was able to bring the loan current and stop the foreclosure)Conventional: 2 years (Same with extenuating circumstances)VA: 1 year (Same with extenuating circumstances)FHA: 1 year (Same with extenuating circumstances)Something else to be aware of is that if you have not owned your principal residence for at least three years, you meet the criterion to be a first-time home buyer. As such, you may be eligible for a number of very attractive programs for down payment assistance and tax credits, such as Mortgage Credit Certificates (MCC). This last is a surprisingly obscure program offered in many states. MCC allows a qualifying buyer to claim a percentage of the mortgage interest they pay each year as a tax credit. Here in my state, California, the credit is 20%. This means that someone buying a $500,000 home with a 5% down payment would receive tax credits of about $5,000 each year.* They’ll receive the credits each year for as long as they live in the home as their primary residence.I hope this is useful.* The credit decreases a bit each year as the loan balance goes down. In the first year, the interest on a $475,000 loan at 5% will be $23,591, so the credit would be $4,781. In year 5, the interest would be $22,043, giving a tax credit of $4,409. If someone paid the loan for the full 30 years without refinancing, the credits would total $88,593.