It was hit. It was hit hard. It was was old, knocked down and Mick was ready to throw the towel in so as to protect Rocky, er HUD. HUD wobbled back to its corner and yelled..."Cut Me Mick.
It was such a great scene and the beginning of one of the largest comebacks in underdog history.
Needless to say, FHA, being down an obsolete and on the ropes was three punches away from devastation. Death was imminent. But the cut had come. The subprime mortgage fiasco and sub prime mortgage mess and wall street and everything else made for a cut eye. This cut cleared the eye enough for FHA to come flying back. The government was in serious discusssions in 2006 and 2007 debating whether or not FHA should even be continued.
Now, having fought back, FHA is the undisputed champ. Not only does FHA get the comeback player of the year award, it's looking the the World Heavy Weight Champ going into 2009. It's the king! It's ALI once again in his prime. Needless to say, expect more great things from FHA in 2009. Yes the DOWN PAYMENT requirements have jumped from 3 to 3.5%, but who else, other than VA and USDA are giving anything less than 5% down? And the mortgage insurance can't be beat....
If you want to grow in 2009, it's time that you jumped on the bandwagon. FHA is going nowhere except up! So many lenders fought FHA in 2008 and have either joined the bandwagon, struggled to survive or closed it's doors. Realtors have fought FHA for a long time. FHA has so relaxed it's appraisal requirements. They really are close mirrors to Fannie and Freddie. Know it realtors or don't plan on selling a lot of homes.
Here's to you FHA.
I'm all in. I'm here to see you defend your title. My prediction....FHA successfully defends its title in 2009.
Larry Bettag - Regional Vice President, Midwest Region
25 Comments on 2008 Comeback of the Year......FHA LENDING!
JAN
02
2009
FHA is a hands down winner - right now. Considering how ill lending practices have hurt us in the past few years (and future we've yet to see), FHA I think will stay very strong, at least for a few years if not always. It went from like 25% of my business to probably 60-70%.
Larry.... great message, but when did HUD ever rethink if FHA should be back? Besides, FHA was always there, it just wasn't used because subprime and automated approvals with conventional loans were to easy at the time. FHA needed to take a little elbow grease. Just my .02... But your last statement, is right on, that so many realtors faught FHA...
Jeff...two years ago, there talk in congress to elminate HUD altogether b/c of the lack of use. I believe that the usage was less than 3% of the market at one point at the peak of Sub-Prime lending. Needless to say, the stall out was a blessing for all. I still find realtors fighting FHA.
Lori..you're right.
Steve...you got it bro. I think now, it's truly here to stay.
FHA has always been a good product, but becasue it was easier the other way and it was cheaper, folks flocked to the non FHA products. Now FHA is cheaper and easier than other products and so it will be at the top again!. Good Reminder!!
Larry: I for one have been using FHA for years and years. For me it is not a new bandwagon to get on. I have been riding in, and have believed in it's usefulness for many years. So, to all you FHA Newbies... get on board if you can find room.
Karen: If you make paragraphs in the actual typing of your post comment, you comment will appear the same. I was about ready to make a comment on how impossible your big blog of a comment looked as far as reading it was concerned. It looks scary. If you are not allowed to edit, you might just re-do it with paragraphs, and hit the submit button again. Take care...
FHA nearly KILLED me this year. I did 5 FHA transactions. 2 fell apart, 2 took 2-3 MONTHS to gain approval (and almost didn't) and only ONE went smoothly. All because of FHA guidlines and rules that were changed prior to closing but after the time of the loan application. The mind blower was that the one deal that went smoothly had all the same circumstances that caused the others to fall apart or have problems and was the last of the 5 to close. On the other hand, I have now found a lender that can still do a 97% LTV Conventional Mortgage. We just closed one last month actually. As long as that's around, FHA simply is NOT an option. And even if and when that doesn't go, if someone can go 5% rather than 3% I would still recommend conventional. BOOO FHA!
Hi Larry - Happy new year! FHA has always been a great loan, but now that the limits have been raised it is available for more properties in our area. It was hard to find properties where FHA worked before. And sure - they have some requirements for the property, but if you are representing the buyer, that gives at least some assurance that the property meets minimum standards if it passes the appraisal. With the low down, it is a way for folks to get an affordable loan without resorting to those scams that put us into the mess we are fighting to recover from.
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Would you believe that I was thinking of a very similar post? I bet you would. Rocky is my guy! I've been a big Sly fan since the first Rocky. We can learn a lot from his character.
BTW...I've been really sick...but I have not forgotten about our project. I'm gonna work on it tomorrow. ~GBU~
Tim Ireland (RE/MAX All Properties) - IMHO - hear me out. I've been a loan officer for 8 years. The first 6 years I closed 1 FHA deal which was a nightmare. (I was a broker then). Since moving to another firm (as a banker), I have closed more FHA loans than ever. In fact, I have closed them in a week. I don't know the relevence to FHA and your market, but it is invaluable here in South Jersey. Pick a really good lender / loan officer and FHA, I promise, will increase your business. Just ask Larry, myself, or someone else here on AR ... Don't give up - just get the right lender. Feel free to bounce ideas or scenarios off of me (us).
I gotta believe its the relative lack of skill of the LO. Closing an FHA loan in 2 weeks is not a difficult thing, and serves more borrowers in today's market place. There is a skill to the submission, but it is not difficult to mater. Upgrade your referral partner and you'll be fine.
Larry... still never heard about it. Rumors can start from any where... there is one now starting about HUD/FHA and credit scores... but it's coming from a few lenders.
@ Tim Ireland... did you ever think it was the loan offices fault? Many don't know how to do FHA loans.... Secondly, semi poor attitude in my opinion based on poor performances by those lenders for what ever reasons, because on a 97% LTV, the rate is much higher. So, who are you looking out for? Besides, those descisions should be made between the borrower and the loan officer. Just my .02.. PS... I have been doing mortgages for over 16 years and FHA loans for 15 years.
Tim...not cool at all...you've definitely not been dealing with the right loan officers. FHA is a deal maker, not a deal breaker.
Jeff....believe it or not I spoke to an ex US senator who was head of the banking and finance committee. It was very real. Just glad that it never got acted on.
If a loan officer istrying to use FHA as a sub-prime vehicle it stands to reason closings will be rough and tough or not at all. Sub-prime is not what the program is designed to be. But with no loan level pricing adjustments and even today 96.5% LTV, the ability to have co-borrowers, gift etc. The list goes on and on. It is THE program for sometime moving forward. Yes, the comeback kid!
FHA saved many a homebuyer this year with the lower downpayment requirements. Around here people were requiring 15% for conventional loans which is prohibitive for many people. The other beauty of the FHA is that for the most part its fixed rate loans so you don't get crazy resets, etc in a few years.
and as all of us who were writing FHA during the subprime heyday know, it was the best program back then too. Rates and terms could not be beat unless you had a borrower that really didn't qualify and/or couldn't document.
The program really has once again emerged to the forefront (rightfully so) and I Tim I urge you to try again with a strong FHA lender. If you don't embrace FHA in '09 it will cost you business (IMO).
FHA is back inthe game with ML 2009-07 and the increased loan limits. And, HECM loan originators must be dancin' in the streets right now!
But, here's the dealio - These new loan limits have been in effect since Feb 24, 2009 but most investors aren't taking locks and all indications that they will have price adjustments too. LP for FHA IS set up to handle the new loan limits, but DU is not!
There are two loan limits for 2008 and 2009 - and whichever loan limit is higher--that's the one you can use.
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FHA is a hands down winner - right now. Considering how ill lending practices have hurt us in the past few years (and future we've yet to see), FHA I think will stay very strong, at least for a few years if not always. It went from like 25% of my business to probably 60-70%.