FHA Loans & FHA Mortgages - Killing the rumor mill !!!

 

I am always surfing the Internet and there always seems to be those blogs and informational pieces that are not just opinion, but completely misleading and wrong. And for the most part, that's how rumors start.

When it comes to FHA loans, I will state this.... I am not god, I am not perfect, and I don't know everything. But I will say this, I would think that I am very good at what I do, that I am knowledgeable, that I think outside the box, and if I don't know something... I will ask and research it first before I write about it. Do I make mistakes?  I think we all do at some point in our lives. But when you put out information that is not even close, that you didn't confirm its source, or that you are just winging it... then I have a major problem with that.

Overall, it's bad enough with the many changes in regards to FHA loans and conventional loans.

 

 

 

 

So, what have I seen that has been misleading or blatantly incorrect?

• Here is a biggie.  Credit scores -  Yes, there are some investors that have changed the minimum scores to 620, but this is not nationally nor across the board. I just read a blog here on AR last week that stated that credit scores were going to change to 620 by 02/12/09 on all FHA loans and VA loans.

Here is the sad part about this, I asked this person where they got his information from and he stated that he received it from two of his reps. Secondly, he was questioned on how much FHA business that he does and he said that he isn't even FHA approved. But that he wanted to put the information out there. I then asked him to fax me or send me the so-called letters that his reps. gave him pertaining to this mandate. That was over 6 days ago and nothing.

Here is the reality of the situation. HUD/FHA never sent out a new mortgagee letter, that would give any or all changes. Congress never passed anything new regarding credit score changes. And this would leave any and all investors and lenders that sell their loans on Wall Street. When it comes to this part, there are no real rules, but that the investor can change and or add any guideline as they see fit in order to be able to sell that loan to other investors or to Wall Street.

 

• There was a rumor going around that you now need 2 months reserves on all FHA mortgages. This is absolutely not true and it is case-by-case, depending if you need a compensating factor on the loan to make it approved.
  

 

• Locking interest rates - I actually had two different clients tell me in the last 10 days that their loan officer told them that they couldn't lock into a rate until 5 business days before settlement. In today's market, you can lock in for 60 days and some will lock in you in for 90 days. But you can lock in your interest rate once you have a property and have filled out a full application. Now, there are exceptions to the application part, depending on your loan officer. But you do need a property with a physical address. There are no more shop and lock programs as there were in the 90's.

 

• Lastly.... FHA loans don't take forever to close. That is usually because of an inexperienced loan officer or lender. FHA loans can still be done in 2 to 4 weeks. I have closed many in 6 business days, but those were emergencies, because the other lender dropped the ball. Preferably on any type of loan, FHA or conventional, it is nice to have 3 to 4 weeks so you can properly process the loan. Processing a mortgage is not like buying a car.  Just food for thought.
  

 

Overall, I just wanted to point a few things out that have disturbed me when surfing the internet, blogs on Active Rain, and from listening to other loan officers. FYI :  Don't always assume when shopping for a loan. It doesn't hurt to do a little searching and ask questions. If the loan officer doesn't seem sure, question them some more and call someone else, it could end up saving you thousands of dollars. Just don't shop yourself out of the market. Please read this : Shoopers that shop themselves right out of the market

 

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- Mortgages -

 

Experience & Knowledge at its BEST !!!

 

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2008-2009 Tax Credit for First Time Homebuyers : 2008 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger