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FHA Attempts to Raise Borrowing Standards; Fails.

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July 16, 2010 – Comments (4)

From CNN:

"The Department of Housing and Urban Development said that it intends to require borrowers to have scores of at least 500 to qualify for FHA-insured loans. The agency has not required a minimum score before."

Now, A 500 credit score is positively wrecked. I'm pretty sure Madoff's is over 500. But whatever ... this is progress, no? No, it's not actually:

"during the second quarter of 2010, no FHA-insured loans were issued to borrowers with sub-500 scores."

I can just picture the FHA executives sitting around a table declaring, "Yes, this will do the trick .." 

 

4 Comments – Post Your Own

#1) On July 16, 2010 at 3:03 PM, davejh23 (< 20) wrote:

Individuals with credit scores below 700 shouldn't qualify for FHA-insured loans.  If they don't want to set lending standards reasonably high, then FHA loans should have much higher interest rates, or default on FHA loans should result in wage garnishment.  I know the mortgage/housing market would collapse without them, but we should get rid of the FHA, Fannie Mae & Freddie Mac?

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#2) On July 16, 2010 at 3:24 PM, G8BigBoom (66.74) wrote:

Make it a 700+ credit score, 25% down payment, a job with work history and the banks money not taken from the fed. I wish I could take money for almost zero percent interest and have it government guaranteed then loan out to a bunch of people with no rules. Who cares if they can't pay the bills when the tax payers will.

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#3) On July 16, 2010 at 6:30 PM, devoish (98.07) wrote:

 FHA Loan Qualifying Summary
...............................................................................

 FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA guidelines for loan qualification are the most flexible of all mortgage loans that require less than 5% down payment.

Following is the basic FHA loan qualification guidelines.

Two Years of steady employment, preferably with same employer. Last two years Income should be the same or increasing. Credit report should typically have less than two thirty day lates in last two years with a minimum credit score of 620 or higher or in some cases no credit score at all. Bankruptcy's must be at least two years old, with perfect credit since discharge. Foreclosure's must be at least three years old, with perfect credit since. Your new mortgage payment should be approximately 30% of your gross (before taxes)  income.

These are some of the most basic of FHA guidelines for qualifying for a FHA loan.  If   you have answered yes to most of these statements, you probably qualify for a FHA mortgage loan.

http://www.fha-home-loans.com/loan_qualifying_fha_loans.htm 

 

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#4) On July 21, 2010 at 12:41 PM, umair11 (< 20) wrote:

FHA rocks world

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umair

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