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FHA is the new sub-prime

By
Education & Training with Independent Leadership & Financial Fitness Consultant

This may put a hop and skip into some of your steps.  A loan program that I've totally ignored in my 12 plus years of originating is now one I have adopted with open arms.  It's called FHA, and frankly it's awesome.  How many of you who are still loyal to Fannie or Freddie can claim they can still do loans for those with 525 FICO's....Guess what....you can in certain circumstances is you push it through FHA.

We're close to closing on a 525,000 FHA (previous Jumbo), and their score is only 525.   They are going to get a 7% rate, and the cash-out basically washes all their debt.  So now it's FHA on the line if they don't pay.

Isn't America great!!!

One caveat though...they actually qualify for the loan in terms of their income, that's one huge difference between FHA and "stated/stated" sub-prime.

Posted by

Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate
Karl:  Where ya been ?  FHA loans are a great way of getting folks financed.  Perhaps you felt there was some sort of "stigma" in having an FHA loan ?  Noper... they work just fine.  Better late than never !
Mar 26, 2008 05:39 PM
K C
Independent Leadership & Financial Fitness Consultant - Pleasant Grove, UT
Karen...believe me...I am a believer now!!!  Jeff Belonger is one of FHA's biggest Advocates, and I see why now.  Our company has 1500 loan officers, and we've gone from 12% of our portfolio being FHA to now over 47% being FHA...huge increase in less then one year.
Mar 26, 2008 05:59 PM
Rebecca Schrader
Competitive Insurance of Dundee - Dundee, FL
Watch out Karl, many lenders are using minimum credit scores to do manually U/W FHA loans.  I have some lenders at 570, 580 and 585.  Maybe the FHA is the new A-.  In light of recent events in sub-prime, I would expect the FHA to loosen up a lot. 
Mar 28, 2008 03:16 AM