Expanding mortgage loans to consumers without a credit score

Expanding homeownership is a goal of both HUD and NAR
  • Throughout 2014 and 2015 we have seen more wholesale lenders create products for people whose credit, income, and collateral profiles do not fit agency guidelines.
  • Encouraging lenders to expand manual credit underwriting for folks with a non-traditional credit profile can help meet the goals of HUD, NAR, Fair Lending, mortgage lenders, and consumers.

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Reposted with permission from Our government created the FHA (Federal Housing Administration) Mortgage Insurance Program right after the Great Depression, to encourage banks to lend to people who have less-than-perfect credit. More recently, the FHA Mortgage Insurance program was used during the Great Recession to cushion the loss of subprime lending. FHA was never meant to insure loans for people with a bad credit history and it was also never meant to insure loans for homes worth half a million dollars, yet FHA loan limits remain quite high. FHA’s Mortgage Insurance Fund losses from insuring loans made during the height of the real estate bubble means FHA must rebuild the insurance fund. Keeping the FHA loan limit high is one way to rebuild the fund. Aperture51 / Shutterstock Note that FHA delinquencies have always been historically higher than other conforming loans sold to Fannie Mae and Freddie Mac, but that’s because FHA has a different goal: L...