I love it when I'm right. For months I have been challenging these renegade lenders allowing unapproved brokers to send FHA loans in and be compensated saying it is a violation of HUD's policy and an impingement on the public trust. "No, no, no, Ken. We have a letter from HUD okaying the way we do it", said my friend.
"Right", replied Ken. "Just because the name is Perfect doesn't mean the ethics are."
On June 20, 2008, HUD issued Mortgagee Letter 2008-17, to remind lenders and brokers of FHA existing policy regarding the use of non-approved mortgage brokers in the origination of FHA forward mortgages.
- http://www.allregs.com/ealerts/updates080811_FHA-MBR.htm
So what's the problem? Simple: everyone has to be paid. The correspondent lender, the broker, the warehouse line, the investor and everyone in between. Adding that extra, non-approved entity there in the middle who has NOT demonstrated net worth or proper liability mitigation, adds two things: higher cost of the loan and higher risk to the borrower and investor.
I have said it before and I will say it again: PLAY BY THE RULES OR GET OUT OF MY INDUSTRY.
And here, by request of Missy Caulk, the link to verify if the bank or broker originating the file is HUD approved. Go ahead, check NOVATION MORTGAGE in Marietta, GA - we're on there ;)
http://www.hud.gov/ll/code/llslcrit.cfm
Rule one: Education Not Legislation
Rule two: If they can't afford it, they don't deserve it
Rule three: Break either of the first two rules and we keep swimming in the cess-pool
See you at the polls in November. I dare you to vote for inexperience in a time like this.
THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.
EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.
Copyright©2008 Ken Cook. Georgia and Florida real estate investment loans, FHASecure and FHA Home Loans, nationwide commercial hard money and small business loans, non-recourse loans for real estate investors
Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender
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