Wanna purchase a 2,3, or 4 Unit property FHA... Not a Shot... At least not any more... If an Investor can't verify Income, doesn't matter if it's pers

Wanna purchase a 2,3, or 4 Unit property FHA... Not a Shot... At least not any more... If an Investor can't verify Income, doesn't matter if it's personal income, Non - owner income, and now...Rental Income... If it is not claimed on Tax Returns and verifiable thru a 4506T... your done! Believe it or not you can do a refi, but not a purchase... Proposed leases are not acceptable anymore.

Only way to use rental income is if it has been claimed by the borrower on their tax returns for the past 2 yrs now... (and this income is of course... verifiable thru a 4506T...

FICO scores and the FHA

The aftermath of the credit crisis is going to have some serious implications on the FICO scores of those getting FHA insured loans. These changes are expected to come in to force in the summer of 2010 and could mean different things to different people as it relates to the cost and affordability of mortgages and most important as it relates to this post - the credit worthiness of the borrower.

• Higher insurance requirements – this change requires that an upfront mortgage insurance premium required of a borrower would be raised from 1.75% to 2.25%.
• Larger down payment – only those borrowers with FICO scores about 580 would qualify for the low 3.5% down payment. Those borrowers with a score lower than 580 would need a down payment of at least 10%.
• Lower seller concessions – this is the money returned to a borrower in exchange for agreeing to a higher home sales price. This seller concession would drop from 6% to 3%.
• Higher minimum FICO score requirements – in addition to needing a minimum FICO score to qualify for the lower down payment option, it may be difficult for a borrower to even begin the process with FICO scores below 600. This higher FICO score requirement is not limited to FHA loans, but is being adopted throughout the mortgage industry; what was once a fair FICO score may now only be considered a poor score.

PrivoCorp (www.privocorp.com) is a large (and fast) processor of FHA loans - but we have not seen a whole lot of scores around the 580's. Probably an indicator of the type of clients we work with. Anyway, these are steps in the right direction - to get loans to deserving people at lower costs. Am sure these new changes will effect some genuine folks who have seen their credit score go down due to the down turn in the economy and consequent unemployment, but unfortunately, that's the way the world works.

Mortgage Market Question?

What are the current market conditions...? Is volume predicated by the Secondary Market, Int Rates, or Regulation?

My feeling is "Sh*t always rolls downhill" ... The Fed has slowed down purchase of MBS, hence, the secondary market has begun to tighten up. They see the exit strategy being not quite so easy come March. Investors (the BOA's and Wells of the world) are booking huge margins of profit on new loans. However, private money is who they will be answering to next. It's a good thing, but in the short term, it's gonna be rough. Watch the MBS ... everything else is truly "Secondary".