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What is HUD and why are they involved?

The United State Department of Housing and Urban Development originated with the U.S. Housing Act of 1937. It wasn’t until 1968 and the Civil Rights Act of 1968, also known as the Fair Housing Act, that HUD was given enforcement responsibility. The Civil Rights Act of 1968 outlawed most housing discrimination and established Government National Mortgage Association (Ginnie Mae). Ginnie Mae expanded the availability of mortgage funds for moderate income families using government guaranteed mortgage-backed securities.

 

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HUD's Mission

As from www.hud.gov their mission statement reads as follows: HUD's mission is to increase homeownership, support community development and increase access to affordable housing free from discrimination. To fulfill this mission, HUD will embrace high standards of ethics, management and accountability and forge new partnerships--particularly with faith-based and community organizations--that leverage resources and improve HUD's ability to be effective on the community level.

What HUD does

Not only does HUD enforce the Fair Housing Act, it also regulates mortgage activity. HUD helps regulate the mortgage system by enforcing the Real Estate Settlement Procedures Act, otherwise known as RESPA, which Congress enacted in 1974. HUD enforces the RESPA to protect consumers in the home buying process and help shoppers be better consumers. RESPA laws are for residential properties obtaining a mortgage, home equity loan, refinance, etc.

When a home buyer decides to purchase a property, they go to a mortgage broker or bank (loan originator) to obtain a mortgage and HUD along with the RESPA laws help protect the consumer from being taken advantage of. The borrower, or buyer, will receive a Good Faith Estimate, or GFE, and HUD has placed rules on this estimate to protect the buyer at closing. Generally each buyer and their agent will get or prepare a HUD-1, a document that lets everyone know what the bottom line is before going to closing. With the GFE the buyer will have in writing an estimate that will help them shop around for the best deal.

 

HUD Fee Regulation

It is important that everyone knows where the money is going when getting a mortgage, and understands the fees and rates of the loan. It is illegal for “kick-backs” or “referral fees” be paid to most fiduciaries in these transactions, and RESPA and HUD also regulate these. It is important that they are involved to do this so that the settlement services charged to the consumer are controlled. RESPA’s goal is to educated consumers about closing costs and the settlement procedures involving real estate.

 

Knowing Your Loan Terms and Conditions

A large part of the “mortgage meltdown” has been a result of shady lending practices. A large number of short sales can be traced back to loans that should never been originated in the first place, but these loan were originated. It is important for buyers to understand the terms of their loan, how much they can afford, and what all the numbers mean. When a buyer is “pre-qualified” for an amount, it doesn’t mean that they should necessarily buy for that amount. It is up to the consumer, real estate agent, and loan originator to work through the home buying process together. HUD can help by regulating and enforcing the laws, but everyone needs to cooperate for the rules to have an effect.

 

Free Listing of Foreclosed HUD Homes

Are you looking for a HUD home. We can supply you with a HUD listing to any home you are interested in. Our office is located in Johnsburg, Illinois and you are welcome to stop by our office to obtain a free HUD foreclosure list or Sign up for a Free Find a HUD Home Search here.

We can help you find a HUD home give us a call at 815-669-4944 and set up an appointment to see HUD listings in your area. There are HUD home listing in all the Chicago Land areas that may interest you. So call us now and get your free listing of foreclosed hud homes today.

You can also contact us at this link Click Here a request "Free HUD Foreclosure List" we will respond promptly to your request.

We service the the towns and cites of McHenry, Johnsburg, Spring Grove, Richmond, Fox Lake, Ingleside, Lakemore, Volo, Round Lake, Round Lake Beach, Round Lake Park, Gurnee, Grayslake, Gages Lake, Antioch, Holiday Hills, Woodstock, Crystal Lake, Mundelein, Waukegan and Many other towns and cites in Lake County and McHenry County Illinois.

 

 

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