I have been very frustrated with the FHA loan qualification set up over the last 3 months. And I have not forgotten that the entire mortgage industry has done a back flip and landed on its back in the last few months either. It's just, FHA is a federal program that has not had any major changes since the Regan presidency if I remember correctly. (which is one of the many reasons the mortgage industry is struggling right now).
But my point is about my poor buyers who have been pulled through the grinding mill, to be told that they need to come up with this or that, or that this property (which would have been financed with no problems 6 months ago) all of sudden has major issues that have to dealt with before funding will occur.
For instance. I had a listing that I was selling for some out of state home owners. The loan my sellers used to buy the home was an FHA loan only 2 years old. But the new buyers had to deal with well issues that the current owner did not have to deal with. This was only 2 years difference in time! What is up with all these undisclosed requirements popping up?
I am not ignorant about the mortgage industry, believe me, but when rules are now being enforced, that I am assuming should have been enforced every year over the last 20 years, it makes you think. Who is, and who is not doing their job correctly? Why would FHA have one standard one year, and just because the market has changed due to the liquidity of the mortgage industry (one of many issues actually), then the next year a home can't be financed using FHA because of what rule change? If there are major rule changes, then why did us real estate professionals not get notified? This particular home ended up being sold, but at a much higher cost to my sellers. All because someone 2 years ago did not do their due diligence in granting an FHA loan to my sellers, OR, is it that the entire system has gone nuts?
Enforcing lending rules when and where you want does not work for the consumer. Yes, I understand that the rules are finally being enforced, but why are we having this problem to begin with? Shouldn't we have been enforcing the loans rules the entire time?
I had another client in August who showed up for a Monday closing, had doc's ready to sign, but when we got around to signing, there was some discrepancy in the documents. So we rescheduled the closing until Wednesday. But what do you know? On Wednesday when we showed up for signing doc's, my client no longer qualified for his FHA loan! This is the same loan that if we could have closed on Monday, would have been just fine!
These changes, these misrepresentations, these..., these..... Enough to drive you nuts.
By the way, my client did end up closing on his first home, but it took another 10 days to work through all the NEW requirements put on him from the Monday to Wednesday time period.
I say this to FHA loan specialists. Please get on the same page. If we were doing this over the last 5 years, we may not be where we are right now. A place where first time home buyers can't buy a home. Like my client, they can be perfect as far as credit, income, ratios, etc., but it is not enough now. It is time for FHA to revamp their product and stop congress with any new legislation to add more rules which most, and I mean > 50% of Americans, will not be able to meet.
Enough for today.