But The FHA Guidelines Say So!?!

By
Real Estate Services with Auto & Home & Life Insurance throughout North Carolina

To spout off that we live in an interesting atmosphere in the mortgage lending business is akin to the genius next door proclaiming professional wrestling isn't real.  Yet, I shouldn't even get started on the latter.  And the former is quite diplomatic in the use of the word "interesting" rather than downright perplexing. 

Let's take for example the title of this post.  I get inquiries daily from Realtors, folks reading posts here on AR, fellow tenants in the building we rent, William Shattner, and former clients about the difference in what is said that can be done and what is actually done. 

"But there's no minimum credit score for FHA Loans," the informed consumer proclaims.  Even so, try finding me a lender or bank who will legitamately close and fund an FHA loan with a score below 620 these days and I will find you an episode of Charles in Charge that is remotely interesting.

You'll find similar discrepancies with Fannie Mae Guidelines.  One in particular, is how many mortgages on different properties that can be on credit before they will no longer lend you a dime.  If my facts serve me well, Fannie's Guidelines now allow up to ten.  However, few investors will even allow more than four.

(Of note, my opinion is if you open up the credit flood gates to quality Real Estate Investors, it will help curb what is wrong with the Housing Industry & the Economy... sooner rather than later.  That though, is another post in and of itself)

What we are experiencing is called lender overlays.  The guidelines say one thing, yet you come to find that lender's aren't abiding by that book of thinking.  The guidelines may say this, but the lender or bank says that.  Their pendulum is tending to swing a bit more conservative than the guidelines of Fannie, Freddie, or HUD for that matter.  While I can't rationalize the pool of brain cells planting the seeds for this line of business dealings, these are the facts right now.

The rules being laid out by the so-called "Big Dogs" are being tweaked a bit by the smaller puppies who are lending the money. 

This is an important reality to understand.  Credit Reporting Agencies, Mortgage Insurance Companies, Ballet Classes involving Mario Lopez, & Lender Overlays are wagging the tail of the mortgage industry.  It may not be fair.  It may not be rightIt may not be just.  But this is the hand that's being dealt, learn how to play the cards.

And deal with somebody who knows how to hold them.

Sorry, my first Kenny Rodgers reference of all-time... I believe.

 

~Of note, this post isn't copyrighted and feel free to copy and paste it wherever you want.  I'm tired of a litigious society of lazy people and frivilous lawsuits.  You want to publish this, go right ahead.  Just try to convince them on a second post that this crap was really yours.~

Jason Sardi

Mortgage Consultant & Fellow Human Being

jsardi@ihmci.com

610-653-0317

 

 

 

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lender overlays
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Ambassador
738,141
Jeff Belonger
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
Social Media - Infinity Home Mortgage Company, Inc

Yogi Bear

 

Sardi.... nah, I am just smarter than the average bear.  ;o)

 

 

jeff belonger

August 09, 2009 08:29 AM
Ambassador
500,546
Jason Sardi
Your Agent for Life
Auto & Home & Life Insurance throughout North Carolina

Steve-O Bamberski - Send me some of that info, I'm curious all of a sudden;)

Neal - Their limitations are much less restricted than they once were, I do believe.  Perhaps you need to talk to a different lender;)  Seriously, they shouldn't be nearly as much of an issue in your area than the HVCC Guidelines for appraisals on Conventional Loans.

Belonger - I wouldn't go that far:)  Yogi has you beat in the IQ department by at least 20 points... and he's sitting at 119.

 

August 09, 2009 08:55 AM
Rainmaker
392,509
Nevin Williams
Raleigh Mortgage Pro
Sierra Pacific Mortgage Raleigh

Jason - "But there's no minimum credit score for FHA Loans," the informed consumer proclaims.  Even so, try finding me a lender or bank who will legitamately close and fund an FHA loan with a score below 620 these days and I will find you an episode of Charles in Charge that is remotely interesting.

 

Sorry...I couldn't help myself!  I hear their rates are reasonable (so I hear)

First Guaranty Mortgage Corporation
Wholesale FHA & VA lender
 
We are still one of the only lenders in the nation financing borrowers with scores below 600.  We require a 530 score.  We boast an array of programs including manually underwriting both FHA & VA loans.  We have and will continue to be ahead of the pack when it comes to rolling out new programs allowing our affiliates to reach out to a larger pool or prospects.  We currently offer the following:
 
- FHA & VA manual underwrites with a 530 score requirement
- Chpt 13 buyouts
- USDA purchase only (requires 580 score)
- Manufactured housing (requires 620 score for existing)
- 1xclose for Manufactured and Modular construction with a 580 score
- 203K Streamline with 580 score
- $100 down in conjunction with 203Ks
- Multi-Unit (up to 2 units - refinance only with 580 score)
- FHA streamlines on month by month bases with 620 score and DU
   Approve/Eligible findings
 
***Special incentive pricing each month for all loans with scores of 660 or more and DU/LP Approve/Eligible findings***
 
You can view our rates at fgmcwholesale.com (username:  sales  password:  sales123)
 
Please call me today - I look forward to hearing from you!
 
Billy Donnelly and Steve Yohler
Account Executives
bdonnelly@fgmc.com
BILLY DONNELLY
571-268-3728 cell
866- 914- 8239  efax
STEVE YOHLER
703-585-3984 cell
800- 509 -9802  efax
syohler@fgmc.com
FIRST GUARANTY MORTGAGE CORPORATION
5303 Spectrum Drive Suite K
Frederick, MD 21703
FGMC FHA ID# 7516800469

 

August 10, 2009 08:04 PM
Ambassador
500,546
Jason Sardi
Your Agent for Life
Auto & Home & Life Insurance throughout North Carolina

Nevin - I'm vaguely familiar but I'm not holding my freaking breath.

August 11, 2009 11:09 AM
Rainmaker
598,584
Donne Knudsen
CalState Realty Services
Los Angeles & Ventura Counties in CA

Jason - I'm feeling your pain, my friend.  I just spent the last two days trying to fulfill a lender condition (not an FHA condition) that was so absolutely absurd.  Try as I did, I could not completely fulfill the condition and it would of taken an act of Congress to completely fulfill the condition to the lenders satisfaction.

When I explained to the underwriter what my clients and I had to do to get what we got, she refused to sign off on the condition.  Thank God for Escalation Team Managers!  Just the thought that we now have to speak with Escalation Team Managers in order to close a loan is absolutely frightening, especially a loan that just a year ago would have been considered an A loan - great ficos and credit history, long & steady income and residence, low dti's, more than sufficient reserves and less than zero payment shock (mortgage is more than $300 less than their rent).  WTF????

August 29, 2009 12:58 PM
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