FHA Modernization Deal Is Close At Hand

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According to Treasury Secretary Hank Paulson on Friday, a deal is close on the FHA modernization bill. This isn’t the first time I’ve heard this, so I’ll wait and see. The story published on Bloomberg.com is also light on some of the important details.

It looks like the new mortgage insurance rules from the House bill will win out. I just hope that they will make some adjustment to them to allow people with no credit score get maximum financing. The rules originally set forth by HUD, for instance, would allow a young couple with a minimal credit history, or even a few charged off accounts and a marginal credit score of 500 to get 97%loan to value financing while a young couple who had chosen not to use all the credit cards they were sent in college would not even be eligible for maximum financing!

In addition, this story again gives no mention to the possibility of mortgage brokers using bonds to qualify for FHA lender approval. This detail is of very great interest to the mortgage broker community. Guess we will have to wait at least another few days to find out.