Possible Changes Ahead For FHA
Just as I said in my post on Friday, “It means that it is more than likely that they will have to increase their upfront mortgage insurance premium and monthly mortgage insurance premiums. Also, don’t be surprised if all banks raise their credit score requirements to 640 or higher seeing as some are still doing loans for score of 580.”
Well, it looks like that is what is on the way. MarketWatch reported that “The Federal Housing Administration is considering a variety of changes — including requiring larger down payments for FHA-insured mortgages, demanding higher credit scores of FHA borrowers and upping FHA mortgage premiums — to manage risk as it deals with losses in its capital reserve fund, FHA Commissioner David H. Stevens said Saturday.”
Here is a stupid comment, “Stevens said quality of FHA loans is much better than risky subprime products that became popular during the real-estate boom.” No wonder why we have had and will continue to have problems, these “brilliant minds” have no common sense. Yes, FHA loans are better than subprime loans but if the person was qualified for more than they can afford it doesn’t matter if it was a fixed rate or an adjustable rate loan. That is like the Saint Louis Rams are better than the Tampa Bay Buccaneers. They both still stink and won’t make it to playoffs.