Anti FHA Reform

[Veronica Corningstone]

Eight consumer groups have jointly signed a letter addressed to U.S. Senate leaders requesting that they consider the effects of FHA reform provisions in the bill. The groups opposed proposed provisions "that seek to enlarge third-party mortgage broker participation in FHA at the expense of diluting financial accountability requirements." A second main concern was the proposed change to have FHA charge risk-based insurance premiums.

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[Greg]

Oh this will just make bankers lose money so they are crying....

I am sorry but brokers should have it so people that go to a broker can get more options.

I am a banker and a broker but I really hate seeing people get a 2/28 at 8% versus an FHA at 6.75% fixed.

[Erik]

Brokers can have it - they just need to do the paperwork and have a bond or pay a fee, if I'm not mistaken.

I wonder if what they're complaining about are the looser guidelines that have been proposed - like the straight 100% program (without DPA). Is one of the proposals to have a sliding scale for MI rates? That's what Veronica's tidbit makes it sound like. If so, the consumer groups are probably also complaining about unequal treatment of people by a government agency, as regards the varying MI rates ("risk-based insurance premiums").

[brendo927]

For some reason I always thought FHA as a more "secure" loan than a conventional loan if you know what I mean. Or more of a straightforeward loan. Brokers also need to be approved through FHA lenders and that takes a while.