Re: A solution to Housing/Mortgage Crisis

I have been in the mortgage business for more years than I care to count and have never seen things so bad. The so called FHA fixes are not really helping anyone. All I do is FHA loans and yet not one client that has asked me about the new FHA programs to help borrowers has been able to meet the new guidelines to get the help!!!!

Too, since the industry has tightened up lenders who are doing standard FHA loans are NOT following FHA guidelines. For instance, there is not supposed to be a minimum score for FHA loans, yet almost to a man lenders are imposing their own guidelines that overlay what FHA guidelines call for. We understand why they are doing these things which is to offset the risk of the loan. However I thought that is what FHA was supposed to provide. The solution to national liquidity will be returning to TRUE FHA lending. We can get to this point by doing three things

1) Have FHA guarantee 30% of the Mortgage instead of 20% as it is now. This will get lenders into more of a comfort zone and allow underwriters to be more comfortable signing off on borrowers that actually qualify

2) Make lenders approved for FHA, FOLLOW FHA GUIDELINES. Right now they are making up their own guidelines and attaching them or overlaying them to FHA loans. Make it mandatory that if they are to continue to lend with FHA guarantees that they must follow the spirit of the guidelines of the FHA loan

3) 90/10 FHA Guarantee For Investment Property: Investors play a huge roll in this real estate market. I believe to keep many thousands of additional properties from foreclosure that FHA needs to create a product for investors. Guarantee 10% instead of 20% for the owner occupied bran

Without liquidity a business chokes to death. Is a government any different????

By doing these three things you free up money TODAY and make lenders more comfortable in covering their risks

John Shaw

john@mtgbuy.com

www.mtgbuy.com