My REALTOR Says You Can Approve My FHA Purchase With A 600 FICO Score, Just Like Wells Fargo
What Mike Jones learned about the low FICO FHA financing wasn't great news. But, knowledge IS power in my mind, even when the knowledge isn't necessarily great news!
I've seen moves by a tiny handful of lenders addressing this market segment. We'll see where it goes from here... Great job, Mike!
600 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:
- 10,000 loan applications (Good!)
- 5,000 loan rejections (Bad!)
- 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!
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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.
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