Monday, September 16, 2013

Will these recent FHA Changes do anything?

Will these recent FHA Changes do anything?

Recently HUD/FHA issued three new mortgagee letters that on the surface indicates a new way that HUD/FHA is going to treat borrowers with past credit problems.

The reason for my skepticism is due to credit scoring. HUD/FHA allows a FHA borrower with 10% down with a credit score as low as 500. Borrowers with credit scores 580 and above can obtain maximum financing. The FHA allows credit scores as low as 500, however, most institutional investors have overlays that prevent FHA borrowers to obtain FHA financing with credit scores below 640 some not lower than 620.

All those recent changes mean nothing if the credit scores are too low and you have no institutional investor to purchase the loan file.
If HUD does not apply pressure to the large banks to go by their guidelines then these guideline changes mean nothing.
Questions, please call or email me with your questions. I look forward to helping you buy your next home even if you had a past foreclosure, short sale or bankruptcy in Kentucky.

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*

Louisville, KY 40222*