FHA uninsured loan in foreclosure

[sunflwrgrl]

What is the name of your state? Alabama
What recourse do I have regarding an unisured FHA loan in foreclosure? My husband and I made our first three payments and for some reason our mortgage lender did not obtain mortgage insurance through FHA prior to our default (due to unforseen circumstances). We contacted our lender about filing a partial claim for the delinquent amount and we were told that they did not get the loan insured prior to default. The lender had five months to insure the loan before we defaulted. We were told that we were guaranteed an insured loan and now we are not able to take advantage of the benefit of filing a partial claim for the delinquent amount. What recourse do we have with the lender regarding this situation?

 

[seniorjudge]

Q: What recourse do we have with the lender regarding this situation?

A: What do you have in writing concerning the insurance? Generally, the insurance must be in place at the time of the closing. I've never heard of that five month deal.

 

[HUD-1]

If you applied for an FHA loan and paid the upfront and monthly MIP, I would demand from the lender the same benefits as if the loan was in fact FHA insured. Don't forget, this lender has a huge problem on their hands, an uninsured, defaulted loan. They are going to be very willing to deal with you on this issue. (Now that there is a missed payment, the lender will be unable to get this loan FHA insured until there is a long history of payments being made and the loan must be current.)

 

[Grandma's house]

What is the name of your state? Alabama
What recourse do I have regarding an unisured FHA loan in foreclosure? My husband and I made our first three payments and for some reason our mortgage lender did not obtain mortgage insurance through FHA prior to our default (due to unforseen circumstances). We contacted our lender about filing a partial claim for the delinquent amount and we were told that they did not get the loan insured prior to default. The lender had five months to insure the loan before we defaulted. We were told that we were guaranteed an insured loan and now we are not able to take advantage of the benefit of filing a partial claim for the delinquent amount. What recourse do we have with the lender regarding this situation?

OMG, you actually think the M.I. on an F.H.A. is insurance for YOU? It is F.H.A. insuring the LENDER in the event they have to foreclose and for any deficiencies at doing so. The lender does NOT get P.M.I for an F.H.A. loan. M.I. and P.M.I are 2 different things. Conventional loans have P.M.I. insurance and IT only covers the difference AFTER foreclosure, long AFTER you are dead bolted out of the house...for the difference of the 80% and the 100% they financed. Further, you may have NO P.M.I at all depending if the lender did an 80/20 (2 loans) etc...however this is BY NO MEANS to insure YOU!!! They DO NOT insure for your benefit. You honestly believe that because you made 3 paymts. (and for unforseen circumstances) stopped making them that F.H.A. is suppose to insure YOUR defaulting??? You think P.M.I is suppose to?
NO...
lol

Here you go...direct from Fannie Mae for CONVENTIONAL LOANS/non FHA

Private Mortgage Insurance


Private mortgage insurance is a type of insurance that helps PROTECT THE MORTGAGE COMPANY against losses DUE TO FORECLOSURE. This protection is provided by private mortgage insurance companies and allows mortgage companies to accept lower down payments than would normally be allowed.

Private mortgage insurance also enables mortgage companies to grant loans that would otherwise be considered too risky to be purchased by third party investors like the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC). The ability to sell loans to these investors is critical to maintaining mortgage market liquidity, which in turn, allows mortgage companies to continue originating new loans.

AND IF THEY DID A 80/20 IT ISN'T REQUIRED AND THESE LOANS, THE LENDER "IS" TAKING A BATH. NOT YOU.

 

[Grandma's house]

And Now The Fha Insurance And What It Is.

FHA MORTGAGE INSURANCE
FHA insured mortgages require mortgage insurance. Mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages and it's required primarily for borrowers making a down payment of less than 20%.

The Mortgage Insurance charged is .5% per year of the loan amount and is charged to the homeowner each month. In addition, FHA charges an upfront mortgage insurance premium of 1.5%.

FHA's monthly mortgage insurance payments will be automatically terminated when these conditions occur:


+++You see...it's like this. Many moons ago people had trouble with down paymts. SO..the government created F.H.A. to assist the less fortunates to obtain financing...So to give the LENDERS insurance to insure THEM to loan to YOU.
Up until VERY recently...as in DAYS ago...we were able to lend to ALMOST anyone regardless of the credit scores that had a TRUE verifiable income that had problems through F.H.A.
Each day the parameters are RIGHT NOW changing. While they ARE increasing the county loan size limits so we can pull some folks out of the sub prime loans they are in trouble with...the STANDARDS are getting really still and the "min. credit" score has risen from 0 to 580 and climbing....You see...in the END it IS the governmt. paying these lenders and is WHY we ARE in trouble. It does not take a crystal ball to know this.

 

[sunflwrgrl]

I know the Insurance is not to protect me

from foreclosure. The lender for some reason neglected to get the loan submitted and insured by HUD prior to the first payment being due. FHA has a benefit to allow for a partial claim for borrowers more than three months delinquent and not more than 12 months delinquent to execute a note to add the delinquent amount onto the end of the loan but because the lender did not get the loan insured (which most lenders do have the loan submitted and insured within 30 days of closing or at least prior to the first payment) we are being deined the benefit due to the fact the lender did not get our loan insured.

 

[tranquility]

If you really are going to be able to pay the loan with the arrears tacked on, I agree with HUD-1, the bank will work with you. But, if I recall, you are not going to be able to pay and you are in substantive financial trouble. The only reason I see for you insisting on this is to stall foreclosure a little and screw the bank out of the house a little longer. Unless you can prove to the courts you can pay the loan with the additional tacked on, you can't prove up even theoretical damages even if the failure to get insurance can be found to be a tort or contract breach in some way.