FHA scam

[wamuwoes]

What is the name of your state? Ma.
Hi, I hope someone can help me! Here is our basic situation:
10/2002 - bought home through Wamu, FHA loan (supposedly)3954.00 upfront premium/$108.40 monthly cost
> 10/2003- got offer to do "FHA Streamline " refi (no doc,no cost - just lowers interest rate)
> 11/2003 - received notice NOT insured.
> 11/2003 - 2/2004 working with WAMU to get insured in time for refi closing date.
> 2/20(?)/2004 - loan insured (approximate date) FHA INS backdated.No refund.
> 3/11/2004 - refi closes also FHA loan (supposedly)
> I spoke with FHA this afternoon and was told WAMU never sent in binder.
> 5/2004 first payment due- not paid
> 6/2004 not able to pay, called and spoke with WAMU who said we did not qualify for a repayment plan that spread overdue amt. over life of loan. Was told once we were 3 months past due HUD/FHA options would kick in.
> 8/2004 began working with HUD counseling agency.
> 8/2004 - 10/2004 no correspondence, nor replies to myself or HUD counselor.
> 10/19/2004 - called FHA National Servicing Center and was told our loan was not FHA Insured.
> 10/20/2004 - called FHA NSC again and spoke with another person "Mike" to double check status as WAMU says I am insured, Mike laughs at me and tells me the matter is between WAMU and HUD and that I have no recourse. Suggested if I called a lawyer that I would be told I had no case. Told me it did not mater that I paid for insurance I did not have and if a refund was sent back it would be to WAMU not me.
>
> My questions are:
> What specific laws did WAMU break?
> Is the fact that I do not have the type of loan I agreed to and was promised grounds for a lawsuit?
> Is WAMU liable for any type of negligence or fraud?
> If I indeed do not have the protection of an FHA insured loan, meaning my loan is now a conventional loan without the consumer protection built into the FHA type loan - what do I do to protect my home?
>
> So you know- in case you are unfamiliar with an FHA type loan, FHA insurance gives lenders confidence in lending to borrowers by offering "insurance" that is a homeowner defaults, the FHA insurance would pay lender for costs incurred as a result of foreclosure. It also protects the consumer by requiring lenders to follow guidelines and specific steps to help borrower get back on track. These different options include reducing the interest rate for a lower payment, spreading the overdue amount over the life of the loan, taking the overdue amount and putting it in a lien against the property to be paid if property is sold. Without being REQUIRED to follow these steps WAMU is able to foreclose much more easily (and quickly) on a home.
>
> Not having this protection means we may lose our home.

TIA for any replies!

[MortgageGuru]

WAMU is insured from the upfront MIP that you paid. If you want to keep the house then either pay up the amount due or file for Chapter 13.

[wamuwoes]

I am not insured, that is the point, neither are they. What about the fact that I agreed to and signed a mortgage (an FHA mortgage) and this is not even the mortgage I have. As far as I know a mortgage company can not change the terms of the loan without the borrowers consent and/or knowledge. This is fraudulent activity /practices on their part.
And btw if I had what I owed in back amount obviously I would pay them. I am not trying to screw anybody, I just want the protection during foreclosure proceedings that I am supposed to be entitled to with an FHA loan.
Don't you think the bigger picture here is that WAMU may be doing this to thousands and thousands of people? That would amount to tens of millions of dollars paid for insurance that is never actually in force. And unless you refi you would never know! If anyone has WAMU as a lender and you have an FHA loan, I suggest you call FHA for yourself and see if you are actually insured. Just because you have an FHA case # does not mean you are insured.
Thanks for your response mortgageguru!

[MortgageGuru]

Ok, you refinanced your house in March. What was the Loan Amount and What was the Appraised Value? If the loan amount is 80% or less of the appraised value then you don't have to have any form of mortgage insurance. At the closing in March, since they had underwriten the loan under FHA guidelines, and it was over 80% LTV, then the up front MIP was rolled into the loan. If it shows that on the settlement statement then you have nothing to worry about. What it sounds like is that WAMU underwrote the loan and during the process of getting the insurance with FHA, FHA turned it down for some reason. At that point, the loan is closed and funded and you are making payments on it. What's the rest of your story? Why is the MI such an issue for you? Has your property depreciated?

[wamuwoes]

Originally Posted by MortgageGuru

Ok, you refinanced your house in March. What was the Loan Amount and What was the Appraised Value? If the loan amount is 80% or less of the appraised value then you don't have to have any form of mortgage insurance. At the closing in March, since they had underwriten the loan under FHA guidelines, and it was over 80% LTV, then the up front MIP was rolled into the loan. If it shows that on the settlement statement then you have nothing to worry about. What it sounds like is that WAMU underwrote the loan and during the process of getting the insurance with FHA, FHA turned it down for some reason. At that point, the loan is closed and funded and you are making payments on it. What's the rest of your story? Why is the MI such an issue for you? Has your property depreciated?

Hi, the amount of the loan was 270K, house is appraised at 315K. When we refinanced as with the original loan it was supposed to be FHA, which required 3900 up front AND 108 a month. We were never insured untill 1.5 years later when we did the refi. Again when we did the refi we paid a premium (prorated taking into account previous up front cost) and again we were never insured. All this is on the settlement statement, as a matter of a fact WAMU is STILL telling me I have an FHA loan, not knowing I already know this to be false.
There are two reasons the FHA status is important to me:
#1 - We paid for it! Over 5000.00.
#2 - we are behind on our payments and IF we had an FHA as we were told we did, WAMU would be REQUIRED to try to work this out. THEY HAVE to look at all options available IF we are FHA as we were supposed to be. If we are not FHA they don't have to do a damn thing to try to work this out and we are much more likely to lose our house.

We are not making payments, as they will not accept anything but total padt due. Whic is more than we could get our hands on right now.
Thank you again for taking the time!

[MortgageGuru]

Take all of the paperwork from your closing and go see an attorney. They sold you an FHA loan and charged you for it. If they couldn't get it insured then it is their responsibility to honor the product they sold you UNLESS there is some obscure clause in your closing paperwork that says otherwise.

[HUD-1]

I have run into several similar cases. The reason the lender never submits the case to FHA for insurance is usually due to staff turnover. Not a good excuse I know, but it happens as they were in a high volume refi environment. Usually, a lender can submit late and get FHA insurance if the loan is current. First payment was never made and WaMu now has an uninsured, delinquent loan and is faced with a major problem. FHA will not insure now until there are 12 months payments made timely. The last thing WaMu wants is to foreclose, evict you and then sell the property. You should be in a good position to negotiate a workout with them, which is what they would be required to do if it were an FHA. In fact, you should demand it! You never mentioned the reason for the delinquency. If there was a temporary loss of income or an increase in expenses, then you may have qualified for FHA Loss Mitigation. If you have a permanent reduction in income, you would not have qualified for Loss Mit.

[wamuwoes]

thanks! That is what I thought. I called FHA and they just laughed (literally) at my dilemna and said the insurance matter was between WAMU and HUD and I not only had no rights, but the matter did not affect me at all. I appreciate your advice.

[wamuwoes]

wow, we were osting at the same time!
woops, must have missed that last post!
My husband was hurt and out of work. +
Our business had a $5000 piece of equipment fail, that we had to replace out of pocket and we lost 3 weeks worth of business. NOt long I know, but when you do not have a cushion, a HIT LIKE THAT really sets you back.

Also, I could see the mistake the first time we were uninsured, but 2X with the same loan - I think it is shady.