Jeff Rickard

100% financing is still available and it comes from qualifying for State, County and City assistance, what I call “real” down payment assistance. In fact their business is booming, and unfortunately like FHA, many loan officers and Realtors have no idea how to work these programs. Why don’t they know these programs? Because for the last five years the industry used a different form of assistance. Continue Reading »

Sometimes, the best intentions ……… BACKFIRE!

Many of my clients have had to endure much unfounded stress because of misinformation about reverse mortgages. This bad information can prevent seniors, whose financial problems could be solved by obtaining a reverse mortgage, from learning more about them. In this article I am taking the opportunity to clear up some of the misconceptions I have often heard.

• At the end of the loan, the lender gets the property.

REALITY: The borrower always retains title and ownership of the property.

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The motivation of this post was a question asked to me by a borrower and their Realtor on Friday. Why didn’t the loan guy I was dealing with know about the option you offered me?

There appears to me to be a silver lining in all the turmoil we are seeing in the mortgage business. The reappearance of knowledge as a value. Knowledge has not really been needed in the mortgage world for several years now. If you could fog a mirror we could get you a loan, well maybe not me, but someone would do “whatever” it took to get you a loan. I do want you to know I will do “whatever” it takes to get you a loan too, except commit fraud. Unfortunately that little caveat did cost me business.

The mortgage industry not only lowered the bar for the borrower but we also lowered the bar for the loan officer. Anyone who wanted to be a loan officer or even own their own mortgage company could do so in a day, especially in Colorado where there was no real regulation until a couple months ago. These loan officers, mortgage brokers, etc. did not need any knowledge to be in the industry, if they had potential borrowers and wholesale representatives or experienced processors, they were in business.

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With higher risk loan types known as C, B, and Alt-A gone or going the old standard is back in style; FHA. The interesting part of this is that if you are a loan officer or a realtor who as come into the business in the last five years you may have never done or been involved with an FHA loan.

A loan product that had a lion’s share of the business several years ago almost disappeared for the last five years. So why is it back? There are many reasons, here are the top 7:

1. It is a non FICO score driven program, so lower scores still have a hope of getting financing. A solid credit explanation letter can help an underwriter understand a credit glitch.
2. Non-occupant co-borrower is allowed. Mom and Dad, or other family members, can co-sign on your loan if you are short of qualifying income.
3. 100% of the down-payment, closing costs and pre-paids can be a gift.
4. If you qualify for down payment assistance from approved sources you can get 100% financing.
5. If you are buying a home that needs work you can do an FHA 203(k) loan and finance the purchase and repairs in one loan.
6. You get a loan that is traditionally much more conservative than C,B or Alt-A loans and there is no prepayment penalties.

7. If you lack credit history, even no FICO scores, we can use non-traditional sources of credit to qualify.

FHA is a great option and maybe the only option for awhile, so take the time to find an FHA approved lender.