FHA Trends; Bank M&A; LO Comp Shifting Away From Volume?

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Posted To: Pipeline Press

A major conversation topic is how lenders must adhere to a new certification when making a Federal Housing Administration-backed mortgage. The FHA unveiled a step last week that said it would make it easier for banks to avoid steep penalties for some errors committed during the mortgage process. With the new provision, banks’ liabilities for some loan errors will be limited, which could mean mortgages will become easier to get for borrowers who qualify for government backing but have low credit scores or high debt. Plenty in the industry say that the FHA program is the “new subprime” although many would disagree. The FHA backs loans to home buyers or mortgage refinancers with a down payment of as little as 3.5% and a credit score of as low as 580 on a scale of 300 to 850. The question that…(read more)

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