HUD recently released through the Federal Register the extensive list of
905 Lenders who have lost their approval to originate FHA Insured Mortgage loans.
A quick review of the many reasons for HUD’s permanent cancellation of these Lenders’ approvals shows how you can’t avoid the basics of qualifying for a mortgage. Those basics are: IAC: Income, Assets and Credit. You are either qualified, or you’re not. If you are not qualified, and a mortgage professional says, “I can do the loan anyway,” well, that old saying comes to mind, “If it sounds too good to be true…”
Here’s the link: HUD LIST
Most often the basic reasons cited for HUD pulling the plug, are:
•lack of 2 years’ employment history
•insufficient qualifying income
•insufficient documentation of either income or assets
•excessive qualifying ratios
•improper credit analysis
I think back to all those clients over the past three years (since the meltdown and the “return to sanity” in originating loans) to whom I had to say, “No, I’m sorry, you’re not qualified for a mortgage at this time,” clients who, I later discovered, went on to other mortgage companies and closed on their loans. I remember thinking, “How the heck did they do that? Was there something I missed?” It took a lot for me to shake off that feeling of inadequacy we all get when an opportunity to close a loan passes you by. Sometimes the Realtor who referred the client to me would call me and say with not a little scorn, “They closed with ‘so and so mortgage company’. Why could they do it and you couldn’t, Trevor?” It was too good to be true…how could those Lenders close the loan and I couldn’t?
The answer is in the Federal Register: I was right, those folks weren’t qualified. They got the loan because someone ignored the basics of qualifying. Today I look at the list of Lenders here in our area who have been cut off by HUD and I see the very companies who closed those loans for those unqualified clients.
Too good to be true, indeed.