Industry NewsMortgage

FHA commits to additional tightening

Tougher underwriting for borrowers with low FICO scores in the works

The Federal Housing Administration has committed to several changes to FHA mortgage programs that, while less drastic than measures proposed by Senate Republicans, will limit the ability of some borrowers with low credit scores to qualify for loans, and raise minimum down payment requirements and premiums for borrowers taking out mortgages larger than $625,000. The changes are designed to shore up FHA's reserves after the agency reported a $16.3 billion deficit in a report to Congress last month, raising the specter that FHA will require a taxpayer bailout next year for the first time in its 78-year history.Sen. Bob Corker, a Tennessee Republican, announced today that the FHA had committed to change and that in return, he will support Acting FHA Commissioner Carol J. Galante's nomination to be FHA commissioner. Corker released a letter from Galante, who promised FHA would "move on" several policy changes by Jan. 31, 2013: Increase underwriting criteria for borrowers with...