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WHO SAID FHA WAS UNTOUCHABLE?!?

By Ann Sabbagh

Mortgage and Lending with Seacoast Mortgage Corporation, RI (20021119LB & 20031576LL), MA (MC2107) & CT MLO 10920

March 17, 2009 04:24 AM

Well, FHA is now part of the mortgage crackdown. Lenders are now scaling back to max 85% cash out. What is this world coming to?! For primary residence, owner occupied up to 2 units we used to be able to refinance up to 95% cash out. FHA has recently reviewed their portfolio and has determined a higher incidence rate of foreclosures for those loans beyond an 85% cash out refinance. FHA is still allowing 3.5% down purchases but they have become more credit score sensitive requiring a FICO score of 620 minimum.

So what is the point of all this? If you want that 95% cash out refinance you better do it now, before April 1^st, 2009. Also if you are out there purchasing, please take care of your credit score. There are mortgage brokers that offer credit repair software that will show you what steps are necessary to improve your credit.

The Spring market is here and Obama's $8,000 is here. So first time home buyers dive into the water...IT'S WARM!!

Ann Sabbagh

Vice President

Seacoast Mortgage

508-243-1190 cell

www.annsabbagh.com

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Michael A. Caruso

Surterre Properties - Laguna Niguel, CA

Both of those upcoming FHA changes (85% cash out re-fi and 620 FICO) seem to be sound policy to me.

Mar 17, 2009 04:37 AM

Heather the Realtor Orlando, Lake Mary

LemonTree Realty - Orlando, FL

First Time Home Buyers, Bank Owned Homes

Ann good blog post. It's true there maybe a day we come back to noone purchasing without the minimum 20% down payment, lets hope it doesnt come to that.

Mar 17, 2009 04:44 AM

Gerry Suarez Jr.

New American Funding NMLS 6606 - Orlando, FL

FL Mortgage Guru

Ann,

Although it really is almost universal, the 620 credit score is not a HUD/FHA thing, it's a lender overlay. I for one can still do FHA to 600 scores and know of at least one other outlet that can do FHA to 580.

It seems clear however that 620 will likely be the rule of thumb soon enough, only more reason for some buyers to act now before guidelines tighten further!

Gerry Suarez, Jr.

Your FHA Loan Pro!

Mar 17, 2009 12:04 PM

Seacoast Mortgage Corporation, RI (20021119LB & 20031576LL), MA (MC2107) & CT - Pawtucket, RI

President, Sr. Loan Officer

Gerry,

Yes, there are still lenders that allow less than a 620 score, BUT they are leaving the marketplace FAST! We are closing them today, but who knows what tomorrow will bring and it looks like sub-620 will be going the way of sub-prime loans....going, going, GONE!

Anytime I take a loan that has less than a 620 score, I immediately lock the loan to secure it. Guidelines change almost daily now.

Thank you for the comment, Gerry.

Mar 17, 2009 01:05 PM

WHO SAID FHA WAS UNTOUCHABLE?!?

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Ann Sabbagh

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