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I almost can’t believe what I just read in Reuters. I’ve picked up on it a little bit as loan officers on the street are telling me that FHASecure isn’t worth the effort, and it looks like this is showing up in the actual numbers of closed loans. According to an article by Reuters Washington correspondent Patrick Rucker on Monday, only 266 FHASecure loans have been originated to date!

I know there was a substantial delay while lenders tried to figure out how to implement the program, and while GNMA got set up to provide the money to lend, but even so the numbers I was hearing were in the 10s of thousands. But I know that word about the program has been out on the street for ages.

So what is the problem?

This program has been widely touted as the answer to the mortgage problem of hundreds of thousands of homeowners. It is one of the cornerstones of the mortgage bailout program we’ve heard so much about in the news lately. Highly disappointing news. Some say the problem is that the rules are too strict to be of use for the average borrower in trouble. Others say the problem is that the lenders can’t sell the loans on the secondary market because investors won’t buy the bonds. Therefore, the lenders are being too strict. Others say that the right borrowers still don’t have any idea the program can help.

FHA Director Brian Montgomery says that although the program has gotten off to a slow start, it is gaining momentum and will still end up helping 60,000 borrowers under present rules and 200,000 plus if the FHA Modernization legislation passes.

I believe that one factor may be that many borrowers are being helped under normal FHA guidelines because they are not yet late on their payments. FHASecure is really only useful for borrowers who are already behind on payments. I guess time will tell.

I still encourage loan officers to get up to date on and become an expert in FHA Lending Guidelines. You may find that you don’t even need FHASecure if you can catch the borrowers early enough.

It Was The Underwriting, Stupid


Related posts:

  1. FHASecure and Foreclosure News
  2. Free FHASecure Conference Call
  3. Will FHASecure Fix the Subprime Mortgage Mess?
  4. FHASecure Guidelines Released
  5. FHASecure Borrower Qualifications

Filed under: Consumer Information • FHASecure • How FHA Works • Industry Information • Refinancing

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