|HUD No. 00-287|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Wednesday|
|Or contact your local HUD office||October 11, 2000|
HUD STATEMENT ON FHA COMMERCIALS
"The Federal Housing Administration (FHA) stands firmly behind our Homebuyer Protection Plan advertisements.
These ads were designed to inform the public of the substantial consumer protections provided in HUDís Homebuyer Protection Plan. This Plan provides consumers with important information about the physical condition of the home and promotes the importance of getting a home inspection. It also holds appraisers accountable for their work.
The Plan includes the following features:
- Comprehensive 4-page form noting physical deficiencies in the home required for every FHA appraisal and attached to every FHA appraisal form.
- Requirement that homebuyers receive and acknowledge "Home Buyer Summary" which clearly and simply identifies all physical deficiencies noted by the appraiser.
- Mandatory appraiser testing
- Notice to all homebuyers urging them to obtain a home inspection
- Increase in the cost allowance of Home Inspections financed by FHA-insured loans from $200 to $300
- Enhanced appraiser enforcement process developed with consulting firm Arthur Andersen
This unparalleled Plan was developed in partnership with the Appraisal Institute, the Appraisal Foundation, consumer advocacy groups, the Mortgage Bankers Association and the National Association of Realtors.
FHA is the only mortgage insurer that has such stringent protection for homebuyers. In fact, one of the nationís leading housing columnists in a September 19 article noted these advertisements and called FHA a consumer protection leader.
Kenneth Harney writes "The Federal Housing Authority, long derided as the lending choice of last resort, has turned itself into what is arguably the consumer-protection leader in the mortgage industry, both for buyers and owners. FHA has pushed through a tough new program for more hands-on appraisals."
The advertising strategy developed by HUD and its advertising consultants called for these ads to expire in early September of 2000. FHA plans to go back on the air later this Fall with a new campaign that may include similar messages promoting the consumer protections provided through the Homebuyer Protection Plan."