Mcdonna1980_IHB
New member
No Doc loans are now being offered through the FHA. I'm such disbelief I don't know how to react.
No doc loans are back
- Thread starter Mcdonna1980_IHB
- Start date
usctrojanman29_IHB
New member
[quote author="Mcdonna1980" date=1237334955]No Doc loans are now being offered through the FHA. I'm such disbelief I don't know how to react.</blockquote>
FHA = Subprime 2.0
FHA = Subprime 2.0
Mcdonna1980_IHB
New member
I always thought FHA loans were not as bad the subprime loans written during the boom because the underwriting was stricter. But, I guess with everyone losing there job they need to bring back liar loans to be able to dish out the money.
Does anyone know what percentage of new loans are FHA?
Does anyone know what percentage of new loans are FHA?
biscuitninja_IHB
New member
Ohh interesting to find out... what are the specs/requirements?
-bix
-bix
no_vaseline_IHB
New member
Considering I need one of those sort of loans (I'm self employed, the Mrs. gets a W2) yipee for my team!
buylowsellhigh_IHB
New member
Let me know when 0 down loans are back too!! 
Mcdonna1980_IHB
New member
[quote author="buylowsellhigh" date=1237481250]Let me know when 0 down loans are back too!! </blockquote>
They are writing no-doc loans RIGHT NOW through the FHA
</blockquote>They are writing no-doc loans RIGHT NOW through the FHA
irvine_home_owner_IHB
New member
I'll take a low-down loan.
After losing most of our down payment in our last house... we could use a 10/10/80 loan in about a year or two.
After losing most of our down payment in our last house... we could use a 10/10/80 loan in about a year or two.
usctrojanman29_IHB
New member
[quote author="Mcdonna1980" date=1237335806]I always thought FHA loans were not as bad the subprime loans written during the boom because the underwriting was stricter. But, I guess with everyone losing there job they need to bring back liar loans to be able to dish out the money.
Does anyone know what percentage of new loans are FHA?</blockquote>
Here is the reality of most subprime loans...the majority were actually fully documented loans and were closely watched for loan exceptions (from what I've heard and read). The problem with the subprime loans is the same problem what exists with FHA loans in my mind....low credit rating of the borrowers. In addition to FHA loans allowing borrowers with low credit scores, they also allow a very low down payment requirement (3-5%). One of the big problems that got us into the housing mess that we are in is that borrower had none of their capital ("skin in the game") at risk so any small drop in price wipes out their equity in the blink of an eye. The same concept holds true for commercial real estate as it does for residential real estate....the "cash" equity the borrower brings to the table, the lower the chance that they walk away from the property. Although great credit scores doesn't necessarily mean that a person has financial capacity to service debt (like we will see when Alt-A loans will start imploding), bad credit scores are a good indicator as to the expected future payment history of a borrower.
Another thing that scares me is that a lot of those idiot mortgage brokers that pushed option-arms, Alt-As, etc are now pushing FHA loans because they make a good amount of money on them. I've already read articles of how there are significant increases of defaults and fraud related to FHA loans originated in 2008 vs. 2007 & 2006. The second potential buyer for my condo was approved for an FHA loan and were only going to put down 5% (their credit scores were in the high 500s) so that's why I wanted the first buyer to buy my property.
Now that being said, I have no problem will lenders offering no-doc loans for folks who put 40-50%+ down on a property.
Does anyone know what percentage of new loans are FHA?</blockquote>
Here is the reality of most subprime loans...the majority were actually fully documented loans and were closely watched for loan exceptions (from what I've heard and read). The problem with the subprime loans is the same problem what exists with FHA loans in my mind....low credit rating of the borrowers. In addition to FHA loans allowing borrowers with low credit scores, they also allow a very low down payment requirement (3-5%). One of the big problems that got us into the housing mess that we are in is that borrower had none of their capital ("skin in the game") at risk so any small drop in price wipes out their equity in the blink of an eye. The same concept holds true for commercial real estate as it does for residential real estate....the "cash" equity the borrower brings to the table, the lower the chance that they walk away from the property. Although great credit scores doesn't necessarily mean that a person has financial capacity to service debt (like we will see when Alt-A loans will start imploding), bad credit scores are a good indicator as to the expected future payment history of a borrower.
Another thing that scares me is that a lot of those idiot mortgage brokers that pushed option-arms, Alt-As, etc are now pushing FHA loans because they make a good amount of money on them. I've already read articles of how there are significant increases of defaults and fraud related to FHA loans originated in 2008 vs. 2007 & 2006. The second potential buyer for my condo was approved for an FHA loan and were only going to put down 5% (their credit scores were in the high 500s) so that's why I wanted the first buyer to buy my property.
Now that being said, I have no problem will lenders offering no-doc loans for folks who put 40-50%+ down on a property.