All signs are pointing to FHA as the savior of this market. Numbers don't lie. FHA originations were in the 2-3% range just a year or so ago; now I wouldn't be surprised to find it closer to 20% of the market share. Amazing loan programs, no minimum credit score (sort of), and 3% down. It's a sweet deal. We got our FHA approval about a month ago and I can't tell you how excited we are about their programs. All but one of them.
FHA Secure. I'm still trying to figure this one out. You have a borrower whose ARM loan resets, the payment goes up, and they get crushed trying to keep up. FHA Secure was orginally established last September to help these folks out and put them in a fixed loan with a lower rate. In July, FHA updated those guidelines and now you can refi any loan, fixed or adjustable, into an FHA Secure loan. Makes sense so far.
But what happens when you owe more than the house is worth? What if you have two mortgages? Now your work is cut out for you. What if you're late on your payments? New guidelines allow lates, allow you to write down or short pay a borrower's current loans. and allow unlimited CLTV's. But is anyone actually doing these loans? After calling all of my wholesale AE's, I've only found one lender (Taylor Bean) that is writing FHA Secure loans. What good is a program if no lenders are on board? I'm trying to figure this one out, so any input would be appreciated. For now, I'm getting mixed signals and I'm looking for a better sign!