Bank Question

http://www.bloomberg.com/apps/news?pid=20601087&sid=azAlyoQMZDyA

I have a question pertaining to this article

Would it be illegal for a bank to make up it's own FHA rules according to this article?

For instance can a bank say a borrower must put 10% down to get an FHA loan if they have a credit score between 620-659?

Sometimes a lender will choose to make a loan that they ordinarily wouldn't do because of compensating factors.  Additinal down payment is one compensating factor that they might look at. 

Under no circumstances a lender can insist any borrower to put down 10% especially for FHA loan. As mentioned by you person with a score of 620-659 should not have any problem getting 95-96.5% finance on FHA loan.

Let me know if you need help with lender names who can do this.

summer.surana:

Under no circumstances a lender can insist any borrower to put down 10% especially for FHA loan.

A lender can make up it's on qualifications and guidelines they want, as long as they stay within all the pertinent laws, acts, and regulations (HOEPA, RESPA, etc...)

summer.surana:

Under no circumstances a lender can insist any borrower to put down 10% especially for FHA loan. As mentioned by you person with a score of 620-659 should not have any problem getting 95-96.5% finance on FHA loan.

Summer,

Lenders routinely have overlays to the FHA guidelines that are more stringent.  This is allowed as the FHA guidelines are the MINIMUM standard.  A lender is free to add additional requirements if they feel it will result in a better performing loan pool.

"Under no circumstances a lender can insist any borrower to put down 10% especially for FHA loan."

First week on the job?

summer.surana:

Under no circumstances a lender can insist any borrower to put down 10% especially for FHA loan. As mentioned by you person with a score of 620-659 should not have any problem getting 95-96.5% finance on FHA loan

What is with the uneducated subscribers these days? I just commented on another post that stated rates are under 5% and to never pay points!!  What???

This is silly! Ever wonder why you can't find many lenders doing streamlines under 620 Fico, even though HUD doesn't have this requirement....lender overlay

Ryan Wiebe:

What is with the uneducated subscribers these days?

Yeah, I'm with you on that Ryan....are these the same LO's that have been telling their customers to not pay their bills because they're doing a REFI?  You ever get one of those?

Was just curious

My bank is cutting out FHA slowly and didn't know if there was anyway we could fight it.

Pretty disappointing as they will not even give us the option to broker.

Andy Newbold:

My bank is cutting out FHA slowly and didn't know if there was anyway we could fight it.

Go work for another bank/lender that does...

This is not a smart move for the bank, sounds like there are other behind the scenes issues with your bank.  Cutting out fha is like taking your legs off at the knees.

Good luck

Ryan , what lender do you work for?