Get a Government Insured FHA Mortgage!

I try to keep my weekly blog post apolitical.  welllllll, this week. . . not so much.

Unless you are paying cash for you new house you will need to get a mortgage loan.  Lenders are, understandably so, looking at mortgage applications more critically than they have in past years.

You CAN Get a Mortgage!  Just because you don’t fit the profile of the top-tier applicant does not mean that you will not be able to get a mortgage at a great rate!  There are MANY alternatives available for would be house buyers.  

FHA Insured Loans – The Government Wants You to Have a House!  The government insures (guarantees) mortgages through the Federal Housing Authority (FHA) for some buyers who would not typically qualify for a mortgage through traditional channels.  If a buyer defaults on an FHA backed loan, the FHA will insure the lending bank against the loss.   

House buyers who use an FHA backed mortgage may qualify for a loan with a down payment as low as 3.5% (A 20.0% down payment is considered typical) and a FICO score below 600.  The cost for an FHA loan is a bit higher, but through the FHA program people who would otherwise not be able to afford a house are able to buy. 

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A Recent Post on Facebook

Below is a post that a Realtor friend of mine posted on Facebook.  The post was made, no doubt, to inform would be buyers that the FHA had made it easier still to obtain mortgage financing. 

The message of the post is that the Federal Housing Authority (FHA) has reduced the period that a buyer must wait to obtain an FHA backed mortgage after a foreclosure or a bankruptcy.

Below the post is my response.

How do YOU feel about this?  Should the FHA insure mortgage loans? 
Post YOUR comments below. 

Posted on Facebook:

I just received this e-mail from my preferred mortgage broker. Great news for those of you who had to give up your homes to short sale or foreclosure in the down market.

The Federal Housing Administration has announced in a letter to mortgagees that it will reduce the time home buyers must wait after a bankruptcy, foreclosure or short sale before qualifying for an FHA-backed mortgage. The period had previously been two years following a bankruptcy, and three years following a foreclosure or short sale. The agency has now reduced the waiting period to one year. “FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage,” FHA Commissioner Carol Galante said in the letter. They must meet the guidelines listed in the letter and do home buyer counseling.

Like · · about an hour ago near Carlsbad, CA ·

Tom Bregman  FHA foreclosures will, in my humble opinion, be the next wave of bank owned properties and will only prolong and exacerbate the instability of the housing market. Sorry Yo, but I believe that the federal government, through the FHA, should be more restrictive and more selective when it comes to guaranteeing sub-prime borrowers with our tax dollars.

a few seconds ago · Like

How do YOU feel about this?  Should the FHA insure mortgage loans? 
Post YOUR comments below.