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.
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