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FHA underwriting time

Mortgage and Lending with Valley Bank

I am posting this information so we all understand to make sure and give us Loan Officers sufficient time to get any FHA loans done without any extensions.  Of course, I know they come up sometimes.  But FHA underwriting time seems to be getting quite long for most investors.  Here at Valley, we have about 6 investors that we work with on FHA deals.  Some of them are still at 7 days but the majority are at 3-4 weeks.  I know crazy right?!?!?

The reason for this is simply put--more people are going FHA.  100% Conventional loans are GONE and 97% conventional loans are requiring a 680 FICO score.  So, there is a TON more flow of people going FHA.  A year ago, we were doing 100% financing with a 600 or even 580 FICO score, which is silly and probably the reason we are where we are today.  This would be a simple fix if those companies would just hire more underwriters; however, they seem to feel it is just a phase that we are going through.  I, on the other hand, don't know if that is the case?  We will see, I guess.

Lastly, I don't want you to get the wrong impression--FHA loans are good loans!  They are just taking a bit longer to get done right now.  It just takes a little patience!

Luke Landis
First Priority Financial - Des Moines, IA
VP of Mortgage Lending at Guaranteed Rate

Maybe you are working with the wrong company. What I mean is that I'm a mortgage banker in Des Moines and we have a FHA underwriter in our office who only underwrites for us. We get loans underwritten in 3 days. My point being that A traditional bank is great, I know because I have worked at several but maybe its time for a career move. And yes I know the grass is always greener someplace else, but I don't have the same problems you do. If you want to know more, feel free to contact me anytime.

Jun 19, 2008 06:01 AM
Amber Ernst
Valley Bank - Davenport, IA

Luke, I completely understand what you are saying.  We have contemplated getting a DE for us here, but we can't seem to outweigh the cons of getting one.  Once you get an in house u/w you Have to use them and you can never send out.  The great thing with us is that if one investor says no, you can try another one, and that option would be gone.  I do hate the waiting but it is just something we have to do in this market and I was writing to tell people that is a common thing going on right now.  We have done some shopping around too.  Thank you for commenting!  Sometimes I do wish we had an approved underwriter.

Jun 19, 2008 06:11 AM
Luke Landis
First Priority Financial - Des Moines, IA
VP of Mortgage Lending at Guaranteed Rate

Well, as you know we always have to take the good with the bad and its never a "perfect" scenario. Hope business is going well in the QC as its a little slower than I like here in Des Moines. Have a great and successful week!

Jun 23, 2008 06:44 AM
Lisa J.

Thank you for this.  My loan package has been at the bank for almost 4 weeks and is still not ready to go to HUD for final underwriting!  The LO has been testy with my husband, and keeps saying I have been approved (we are working directly with a lender) but seriously, I am afraid something is going to go wrong.  At least I know turn time is bad in most places.

Sep 29, 2008 01:34 PM

How long is FHA underwriting taking now. Ours has been there since Januray 14 and still nothing. Our lender says everything is fine that they are just back logged, but we are getting anxious.

Jan 26, 2009 09:30 AM

Our FHA loan has just gone to HUD for final underwriting. The underwriting process started in the first week of January. We had a 45 day escrow and we'll go past that- but when we went into escrow, we figured closing earlier would be easy. It has made us very anxious but apparently everything "looks good". It's just difficult to hear no update for a week at a time and feel like you're bothering someone to see what is happening.

Feb 13, 2009 02:59 AM

We are doing the 100% rural development. The underwriter has had it for 6 weeks now. I call the LO everyday to check for an update. Our current home got damaged in Hurricane Gustav and Ike and we have leaks in our bathroom and dining room everytime it rains. My husband spends tons of money on tarps that don't seem to work againest the heavy rain. We have told our LO all this and he said that he has urged the underwriter to move things along so that we can move into our new home, but to no avail. I am so frustrated and furious at how long this is taking. We began this whole process in Sept. 2008 after the hurricanes and it in now April 2009. My friend built a house beginning in October of 2008 and she is moving in today. I guess if you have the money to build, underwriting doesn't take as long? We are in too deep now to turn back, so we just wait. I wish my LO would give me the underwriter's name and number so I could hear for myself that nothing is wrong. One thing I have learned from all this is that customer service is dead.

Apr 15, 2009 06:52 AM