Are lenders turning down your FHA Alternative Credit Files?

D.Bass it isn't that Lenders that are not doing FHA Alternative Credit Loans but that their Investers might not be buying those loans from them on the secondary market.  If Lenders can't sell the loans, then they will either have to keep them in their own portfolio or not do them

The same is true for Credit Scores.  As you know FHA is not Credit Score driven but many Investers are purchasing FHA Loans when the Borrowers middle score is under 580 no matter what the DU Findings say.

I too am upset about many lenders being so much more strict than FHA/HUD requires on FHA loans. Unfortunately, the rules very definitely state that lenders may have stricter requirements than FHA. I don't know why on earth they would, since HUD pays off the loan if it defaults.

I am tired of hearing the "secondary market" excuse from them though. That really only applies to "pass-through" lenders who are selling the loan to another lender and calling them an investor. I am told (although I haven't personally read through the GNMA docs) that GNMA - which is the real secondary market investor for government insured loans - does not have such extra requirements. There are only higher interest rates on bond pools which include such mortgages.

Thanks!

Carl Pruitt

Carl is right again from what I can see....this goes for conventional mortgages too.  Lenders can have stricter guild lines and it seems that right now, most do. 

Bob Mitchell

ValueList Real Estate Services, Inc.