My REALTOR Says You Can Approve My FHA Purchase With A 600 FICO Score, Just Like Wells Fargo

Mortgage and Lending with Advanced Funding Home Mortgage, NMLS#13287 NMLS#272088

Here are some great stats on the low fico FHA program's success/failure at Wells Fargo...I think the point here is, it's great to have the program available, but just be aware that the likelihood of success is pretty slim.

Original content by Mike Jones NMLS 223495

Wells Fargo FHA Program 600 Fico: Mike in Tucson, AZ mortgage lender600 FICO!  3.5% Down!  "A Proactive Approach Because You Deserve It!"  ...and other marketing drivel...

Inside Wells Fargo...

According to an insider at Wells Fargo Bank, this program (nationwide) has resulted in the following since its recent inception:

  1. 10,000 loan applications (Good!)
  2. 5,000 loan rejections (Bad!)
  3. 18 loan approvals (Ugly!)

The rest of the loans are still out there in limbo.  (That's a technical term for "We haven't gotten to your loan yet.  We're busy working on other loans.)

REALTOR Marketing Implications:

  • This is not a profitable segment of your market.  Don't spend a lot of emotional capital or marketing dollars pushing a horse that won't run.
  • These are hard loans to get approved.  Wells Fargo isn't the only bank to agree to accept loan applications under this FHA program, but the results they've had ought to put up a huge red flag for agents hoping to close FHA purchases.
  • Don't beat up your lender.  If you're going to work this segment of your market, make sure you use a lender who knows the guidelines.  The guidelines are VERY strict.  The reason that those 18 loans got approved is likely due to a lot of leg work on the part of the Loan Officer PRIOR to submitting the loan to Underwriting.

 LENDER Marketing Implications:

  • This is not a profitable segment of your market either.  Don't spend a lot of emotional capital or marketing dollars pushing a horse that won't run.
  • Educate your REALTOR friends!  Their buyers will be flooding them with calls because of the marketing pieces done by Wells Fargo and others.  Help them understand how stringent the underwriting guidelines are for FICO scores this low.
  • Do your homework.  Be prepared to lose REALTOR relationships if you and the agent don't tag-team the buyer with the same message.  If your REALTOR has an expectation that her 600 FICO buyer can get a loan--and you don't do it--you're going to lose that relationship.

Implications for my borrowers:  There's A Better Way!

  • It's much easier for me to help you get your credit score up from 600 to 640 than it is to leave you where you are and hope that you can buy a home.  Let's talk!



I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender.

NMLS #223495

SUNSTREET MORTGAGE llc ~ Correspondent Mortgage Bank
Offices (AZ) Mesa, Tucson, Sierra Vista, and Nogales.



Comments (2)

Kevin Hancock
Evergreen Home Loans NMLS 3182 - Poulsbo, WA
The Hancock Mortgage Team

Great post, and thanks for the info!

Apr 06, 2011 06:28 AM
James A. Browning
Browning Real Estate School/REO Institute - International, IT
MRE REOCertified(R) SSCertified

Thank you for sharing your blog; we need Real estate Professionals to share their comments and information regarding their markets and experiences. Thanks again from beautiful Colorado

Jun 08, 2012 01:31 AM