http://www.loanbiz.com/blog/2008/04/09/fha-rescue-get-it-while-you-can/ Loan Business News, Information, and Consumer Education Thu, 09 Feb 2012 12:14:27 +0000 http://wordpress.org/?v=2.3.2 http://www.loanbiz.com/blog/2008/04/09/fha-rescue-get-it-while-you-can/#comment-133 lfreeman Thu, 10 Apr 2008 17:19:23 +0000 http://www.loanbiz.com/blog/2008/04/09/fha-rescue-get-it-while-you-can/#comment-133 Now is definitely the time to analyze what worked and what went wrong in mortgage lending. No down payment doesn't work -- if borrowers have problems with their mortgage they are far more likely to walk away when the entire loss will be born by taxpayers, lenders, investors, and insurance companies. Similarly, brokered loans have have resulted in default/ fraud rates of up to 5 times that of retail-originated loans. Getting rid of brokers would leave a large hole in the market and drive out competition -- so instead brokers need to have a stake in the loans they originate -- in the form of bonds or insurance and they should face strict licensing / education / conduct requirements as well. Now is definitely the time to analyze what worked and what went wrong in mortgage lending. No down payment doesn’t work — if borrowers have problems with their mortgage they are far more likely to walk away when the entire loss will be born by taxpayers, lenders, investors, and insurance companies. Similarly, brokered loans have have resulted in default/ fraud rates of up to 5 times that of retail-originated loans. Getting rid of brokers would leave a large hole in the market and drive out competition — so instead brokers need to have a stake in the loans they originate — in the form of bonds or insurance and they should face strict licensing / education / conduct requirements as well.

]]> http://www.loanbiz.com/blog/2008/04/09/fha-rescue-get-it-while-you-can/#comment-132 K Thu, 10 Apr 2008 02:21:04 +0000 http://www.loanbiz.com/blog/2008/04/09/fha-rescue-get-it-while-you-can/#comment-132 Well this is definitely encouraging. So in order to deal with this deficit, they are planning on charging the new buyer/borrower, rather than going after those that created the issues. Seller financing the down payment for the buyer sounds like a pretty desperate situation - I wonder what were they all thinking... Well this is definitely encouraging. So in order to deal with this deficit, they are planning on charging the new buyer/borrower, rather than going after those that created the issues. Seller financing the down payment for the buyer sounds like a pretty desperate situation - I wonder what were they all thinking…

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