Around this time last year (maybe slightly earlier) FHA became the buzz. At the time, our company made a decision that the buzz would fizzle out and FHA is not a long term solution to the problems plaguing the mortgage industry. Today, our beliefs are confirmed by recent news that FHA loans are increasing in delinquencies with nearly 7.5% being "seriously delinquent" (90+ days). These loans are government backed, but at what point can the government no longer afford to back the losses? I am glad to see that other mortgage professionals are confirming our thoughts and we are ahead of the curve.
Let me clarify that I do not feel all FHA loans are bad. There are scenarios that fit the mold, maybe 1 out of 10 loans, but mortgage professionals are relying too much on selling "government backed loans". AIG is government backed as well, how are they doing?
The latest FHA news is another reason you should be working with a trusted mortgage professional who understands the industry. Countless numbers of real estate agents ask, "This loan is going FHA right?" And I respond, "Why should it?" "Oh, well I just heard that was the best way to get a loan these days." Sub prime loans are a fad and we all know how that worked out!
If I listened to what 75% of people told me in this industry I would be out of a job right now. Fortunately I don't. You shouldn't listen to what everyone tells you either, including the media.
Have a great day!
Subscribe to:
Post Comments (Atom)
Posts
jerk.
ReplyDeleteI have an FHA loan and I'm doing just fine. I don't know if I agree. I think it's a great option, especially when you don't have the money for a 10-20% down payment that Freddie Mac and Fannie Mae are asking for. Money can be gifted, it's win-win for seller and buyer.
ReplyDelete