What happens if I have an uninsurable FHA loan? How does this effect me?

sammy what did the fha notification say? are they requiring you to pay back the entire balance at once? i find that hard to swallow.

as for the lender, your mortgage would have been transferred to a new company for servicing, etc. if the loan is not deliverable to fha, then that lender is essentially forced to "eat it." by that, i mean that they'll have to absorb whatever loss the original lender would take for having made the error in granting you the loan.

i really don't see how they can expect you to make restitution for the lender's error.

no we are not being required to pay back the balance, it almost sounds that the new lender will have to "eat it" and that our principle balance will be reduced by the ufmip we financed into the loan. but would this also mean that we would no longer have to pay the monthly mi as well? i feel that this can't be right that we could actually benefit from a lender's error like this and not have it effect us badly. i know that if our loan is not insured by fha that we can't refinance into another fha and would have to go conventional if we wanted to refi later on, but what else would this mean for us? does this really only effect the lender and not us as the homeowner?

Your present lender will let you know whether or not you will liable to pay the mortgage insurance or not. You should contact them and clarify your case.

i'm not sure why you said you cannot refinance into an fha loan in the future. there's no reason why a conventional loan cannot be refinanced into an fha loan under ordinary circumstances. now if fha is telling you that, i will believe it, but it would seem that could be true only if they are claiming (like the Who) that they "won't get fooled again."

as for the mortgage insurance premium - it would seem utterly useless for anyone to ask you to pay that, inasmuch as there's no insurance being paid for with such a premium. the servicer, in my opinion, ought to leave you alone on that front. somebody else's error ought not to affect you adversely, and while i agree that you shouldn't necessarily benefit from their error, i suggest you go with the flow in this case.

it seems you've simply got to make your mortgage payments, as billed, just as any borrower is obligated to do.

Can you tell me what happened with this? We are currently in the same situation.
Thank you!

Jbo, it seems nobody ever followed up on this one.

i recently was denied on a homeowners claim and they may deem my home uninsurable they said. Where do I turn if that happens. What would happen to my mortgage. Balance is less than $70g, and land and buildings are worth at least $150g-$200g, its about 1/3 acre of land.

Hi Guest,

If the property has been declared as uninsurable, then none of the insurance companies will be ready to offer you a insurance for that property.