Home : Blogs : Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans : Mortgage Knowledge at its BEST!!!! (Jeff Belonger)

FHA Loans & FHA Mortgages - setting the record straight !!!!

fha loans & fha mortgages FHA Loans and FHA Mortgages -

Believe it or not, for many areas across the United States, in today's market, FHA mortgages seem to be about 50 percent of today's real estate transactions. What has bothered me since there aren't as many mortgage programs as outlets anymore, is that more and more lenders/loan officers are utilizing FHA loans now than ever before. And the crime to this surge of FHA loans is that more and more loan officers are just making up stuff that isn't even 1 percent true, just to get the borrower in the door.

What problems am I starting to notice or see on a monthly basis just in 2009 when it comes to FHA mortgages?

Origination Fee : I just wrote about this a few weeks ago, FHA origination fees. The loan officer told the borrower that half of the origination fee went to HUD/FHA. This is a complete lie by 110%. Don't walk from this kind of loan officer, but run very quickly.

FHA case number : I had a previous borrower told by a loan officer that they were working with that they couldn't start on the process of their loan until they had the FHA case number from the previous lender. Another complete lie. You don't need this case number even to start the appraisal or to even underwrite the loan. The appraiser would need the case number to complete the appraisal. And the lender would need it to close the loan.

Rate Lock : Don't lock into your rate now says the loan officer. The loan officer tells you that rates are going lower. Hhhhhmmmm... I wish I had that crystal ball. Maybe they feed this into your head, because they gave you a great rate while you were shopping, but that they might not be able to give you this rate later on. Hence why they said you should float. When comparing good faith estimates, you should always do this with everyone on the same day. But that is another topic that you should read about. : Please read : Good Faith Estimates

Monthly Mortgage Insurance : There are still some loan officers that will tell you that the monthly mortgage insurance for FHA loans, MMI, will stay on there for the life of the loan. They sometimes tell you this, because they are trying to make the conventional look better. Especially if they don't do FHA loans. But again, this is a complete lie, because this was changed over 5 years ago by HUD. It works the same as a conventional loan, if you put less than 20% down, that the MI will fall off when you hit the 78% LTV mark. You could always appeal it when you hit 80%.

FHA loans are harder: The FHA mortgages are harder or take much longer. Any loan takes about 3 to 4 weeks right now. Sure, I just did a FHA loan from start to finish in 9 business days. But a very good loan officer with great support can usually get things done quicker.

FHA appraisals are tougher : False... especially with the new HVCC guidelines for conventional appraisals. But even if it wasn't for that, HUD made less requirements when it comes to FHA appraisals. All of this changed over 8 years ago.

Conclusion : I am a firm believer in giving some people a second chance when it comes to some issues. But why would you give a loan officer a 2nd chance when they completely lie to you about the origination fee? Or anything else for that matter, that you can prove. We are talking about one of the biggest financial transactions of your life. There should be no second chance for this kind of example, no matter if the loan officer promises you a lower rate, a quick closing, etc, etc. Why play with fire, right?

FOLLOW ME ON FACEBOOK

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

- Conventional Loans - 203 k loans -

- Mortgages -

Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Posted by Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans on 06/28/2009 09:42 AM

Comments (13)

fha loans, fha mortgages, mortgages, origination fees, fha origination fees, fha rates, new jersey loans, new jersey mortgages, florida loans

Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: FHA Loans & FHA Mortgages - setting the record straight !!!!

Post is included in group: The FHA Mortgage Group
Post is included in group: Realtors®
Post is included in group: Mortgages
Post is included in group: All About Mortgages/Mortgage Networking
Post is included in group: 1st Time Buyers

13 Comments on FHA Loans & FHA Mortgages - setting the record straight !!!!

JUN

Whenever I speak with a buyer whose lender says that the conventional loan is the only one they can get, I check them out and find that they are not approved for FHA.

Sad but true.

The thing that gets me the most is the MI aspect. There is so much disinformation out there. My pet peeve???? Those who don't offer it (brokers,etc) and sell against it by the disinformation about MI. Or those who just recently got the ability to go FHA and think that they're experts. Neither is true and it's a disservice to our industry.

Lenn, we are seing the same cerap in West Michigan. Same thing with our MSHDA programs. Folks who are not approved to do them claim they don't exist.

Thanks for the always up-to-date information! I <3 FHA!

LENN.... . that scares me,... because if you can do it with a conventional loan in today's market, then there should be no reason why you can't do it FHA. It just comes down to which is better. Now, as you state it... if they say conventional is the only way??? Then I am really scared. Sure, could that be the case? Possibly... but the odds are against it. thanks

LARRY.... . as old timers, you and I, this is beyond pathetic and sad. Especially the misinformation to sell against FHA, just because that loan officer either doesn't have it or just doesn't like doing them.

I am doing a loan right now, that another lender had for 1 1/2 months, trying to do it as a conventional loan. Even though they are FHA approved, they never tried it. They had a mid score of 605 and I got it approved as a FHA loan in the system. I worked on the credit score and it got it up to a 620. Not sure what this loan officer was thinking... and it's a large company that is part of a real estate company.

RON.... . I hear this often also... those lenders that don't have the state bond programs for first time homebuyers, but make the borrower think that it's not possible, hard, or not available, just because they aren't approved with the state. thanks for your input.

TERESA.... . . I love them and have loved them since I first started in mortgages in 1992. Many lenders back then or especially from 2000 - 2005, weren't FHA approved, because you could do most scenarios between a conventional loan and a subprime loan, even if FHA would have been better for the borrower. And I know of some loan officers that put a borrower into another mortgage than FHA because it was easier for the loan officer, even though it wasn't better for the borrower. Sad, yet so true. thanks

I have found fha appraisals to be MUCH pickier. I'd never seen an appraiser run the bathroom faucet while flushing the toilet to check for a difference in water pressure! There is definitely a different standard or fha checklist from my experience.

JENNY.... . maybe that appraiser is just afraid and is using the old standards.... but as I mentioned, this is not true any more. I just sent your response to one of my appraisers and this is exactly what he said...

"That was the old standard. Maybe the appraiser suspected some problems with the plumbing and was just checking. I don't get involved in the general home inspection stuff anymore. I used to check for leaks under sinks, electrical outlets, etc.....not required now."

In any case, that was just food for thought...especially from someone that has been appraising for over 20 years and someone that was always conservative. thanks

JUN

Hey Jeff. I'm about to give your contact info to a couple of first-time home buyers. Also, have you heard from, or called Kamil? He's the tenant in the Short Sale townhouse I have listed.

JUN

Aloha Jeff,

Long live FHA!! We just sucessfully closed a $790,000 transaction and couldn't have done it without FHA. I'm not sure why but many loan officers out here in Hawaii consider it to be the old sub prime? I never did a sub prime loan but have you any idea why the connection would be made? Aloha

JUL

for mortgages with conditions fifteen years and reduction and with Loan To Value over 90%, annual premiums will be canceled when the Loan To Value comparative measure reaches 78% in any case of the volume of time the mortgagor has paid the premiums
- for mortgages with conditions some-more than fifteen years, the annual debt word premiums will be canceled when the Loan To Value comparative measure reaches 78%, supposing the mortgagor has paid the annual reward for at slightest 5 years.
- FHA mortgages with conditions fifteen years and reduction and with Loan to Value ratios of 89.99% and reduction will not be charged annual debt word premiums.

LISA.... . I just sent you a follow up e-mail. thanks

UNKNOWN... . not sure why many loan officers would not look into FHA. It has saved many deals.

DAVID... thanks, I think... this still won't mean much to many, because they can't even get the basics. Besides, where did you copy this from and it would have been nice if you said something else, telling many what your point was. But as mentioned, I would like to know where you got that from for several reasons. thanks

JUL

What mortgage company do you work for?

Keith... I am not sure why I am even responding to this kind of question. WHy leave it in a comment? DO you see that you can e-mail me? Do you realize that my company is listed on the top right hand of this page and if you click to my profile page, it's listed on there? Besides, you don't even tell me why you are asking. This all might sound semi rude, but I find your question odd and questionable.

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?