I Listen yesterday to Mr. Obama's little speech laying our his "plan" for the housing mess and kept 
wondering were the little old lady from the Wendy's ads in the 80's "wheres the beef"
After all, HOW are "WE" going to do this? A little while back when the "sub prime"market was imploding we received this wonderful program called "FHA Secure". This program was to help save homeowners just when the mess was starting with the ARMS adjusting all over the place and house payments going up hundreds of dollars in some places. So what happened? The banks didn't and wouldn't make the loans.
One case in point is a client of mine that got hurt on the job and lost 75% of his income for 4 months. Instead of missing a mortgage payment they lived on the credit cards and and ran their debt up. So, now drowning in debt and back to work they are struggling to keep up and yes are missing so payments on the credit cards. Nothing major a 30 day here and 30 day there. With the debt loan maxed to the limit the credit scores are low and now we have missed payments so we dip below 500. BUT the FHA Secure program was designed for these people. They are the "Poster Kids" of FHA Secure. But to keep this post short, lets just say they lost the house because the banks wouldn't, couldn't make the loan.
So, fast forward to now.
We have the government making this wonderful speech and I really loved the line that he want to stay and hang out yesterday but had to get back to work.
And we have the banks tightening the guidelines. Now, we know most of this "plan" will probably fall to FHA insured loans. Why? Because of the mortgage insurance that will be charged on higher loan to value loans. Look, if you bought right with 20% down and are not struggling with your payment and your homes value has dropped you are not a candidate to refinance. Why pay mortgage insurance?
So back to the changes. 580 scores are now 620. So, if you are struggling and have maxed out your debt and maybe missed a payment you will be under 620. Don't believe it, have your credit pulled. Yesterday, got an email from our secondary department that we now longer have any investors that will purchase a loan from us that as a single 30 day late int he last 12 months. That right there just got every one of these loans denied.
So, President Obama tell me this, just how are we going to do this?
Are you sir going to be the underwriter and the bank that makes these loans?
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