I hate to say “I told you so…” but I have been warning my readers for awhile.
Well…last week the Secretary of Housing and Urban Development (HUD) testified before the House Committee on Financial Services to address several policy changes to improve the financial performance of the .
In case you didn’t know, thanks to the mortgage meltdown over the last two years, FHA is the best way…and in some cases…the only way to get a mortgage after bankruptcy.
What does this mean to you?
It looks like the FHA is planning to hold lenders liable for loan losses.
Translation…It will cost you more money to close a mortgage.
In addition, FHA also plans to tighten its underwriting standards. These changes will include…
- Raising minimum FICO scores for new FHA borrowers
- Increasing the borrower’s up-front cash requirement
Translation number two…If you’re in the market to finance a home, do it sooner rather than later.
Usually when FHA proposes changes, it’s another way of saying that they’re coming soon—real soon!
Probably by the end of January, 2010
There is a way to get “grandfathered” in…if you submit your credit application to an FHA lender and get approved. Once you do that, you’re in (using the current guidelines).
Welcome to the new credit economy,
To review the HUD secretary’s entire testimony, go here.
Until next time,