Comments on: Is Lowering The Bar For FHA Mortgage Broker Approval A Good Thing?

By: Bob McBlair

Bob McBlair — Thu, 19 Mar 2009 18:17:53 +0000

I have been in business for 11 years as a private mortgage broker. I have established my business on honesty and integrity, moving carefully into conventional financing as my business has grown. I am doing well but want to serve my community better (I am the only mortgage broker left in a community of 20,000 people). FHA and USDA are what we need but struggle with the heavy regulation of doing those loans. As people are being turned away from banks, I need to be able to help but my hands are tied. Surety bonds are the answer and I have complied with every part of that as well as the heavy regulation by DFI. Isn’t that enough to verify my integrity and desire to help people?

By: jerry

jerry — Wed, 27 Feb 2008 17:15:53 +0000

I agree with James on this. In 11 years in this business I can count on one hand the number of sub-prime loans I have done. I’ve done one option arm and that was on a co-brokered loan that the co-broke setup with the borrower (I do not intend to co-broke any more loans). I cannot and will want attempt to meet the old requirements and in order to stay in business I will need the FHA. Hopefully the politicians will move their butts on this quickly.

By: Carl Pruitt

Carl Pruitt — Sat, 29 Dec 2007 04:13:10 +0000

James,
Very good points. I agree with you. I could be wrong, but my feeling is that the lenders have learned their lesson about neglecting quality control just because they are selling the loans. They realize now how quickly the flow of money they need can dry up. There's no reason to inject any more bureaucracy into the situation than necessary.

By: James324

James324 — Thu, 27 Dec 2007 16:59:41 +0000

As an upstanding mortgage broker, I would submit to you that the exposure to a mortgage broker (whether they know it or not) is far greater by posting a surety bond than producing audited financials. If unscrupulous activity is going to occur, I stand to immediately feel the wrath if a surety bond is revoked and all of my assets are frozen, thusly shutting down my accounts at warp speed. I also believe that following the VA’s lead by letting the lenders determine what brokers they want to sponsor is the ultimate test as to how upstanding a broker really is. Afterall, if it’s the lender’s money I’m brokering, shouldn’t they have the largest say in how reputable I am? I’m a huge fan of the surety bond provision quite simply because I don’t want the expense of audited financials. Thanks for your interest in this issue.