Oct. 4, 2007 - Mortgage money is out there

It's not exactly a mortgage meltdown

Despite what is hyped daily in the news media, mortgage money is plentiful. However, you should know that FICO credit-score standards generally are higher than a year ago and stated-income mortgages with no verifications are hard to find. Kenneth R. Harney, reporter for the Washington Post wrote, "Jim Brown, chief executive of Veteran Mortgage, agreed that "the 'mortgage meltdown' idea is way overstated…a lot of people think that the mortgage market is in much worse shape" than it actually is."

Buyers will find that most lenders' underwriting standards are stricter than they were a year ago. Jumbo loans (more than $417,000), for example, may often require two appraisals, including one by the lender's chosen appraiser.

Some borrowers may choose FHA insured mortgage programs. The Federal Housing Authority (FHA) offers loans for those with past credit problems. FHA loans have been helping people become homeowners since 1934. These loans are consumer-friendly with no prepayment penalties, are flexible and generous for borrowers currently needing less than $417,000. Strict compliance of documented income and assets is required. Franklin Township offers many housing options that fit within these guidelines.

Help could also be on the way from our US Congress. The House of Representatives passed a bill on Sept. 18^th allowing FHA loans to go as high as 125 percent of an area's median home price or 175 percent of the limit for loans purchased by Fannie Mae and Freddie Mac. A companion bill approved by the Senate Banking Committee would place a cap on FHA loans at the Fannie Mae-Freddie Mac limit that is currently $417,000.

Overnight mortgage rates from Bankrate.com

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