I find it alarming that so many so-called mortgage professionals and journalists have consistently and loudly proclaiming that FHA is the “new” subprime. In reality, nothing could be further from the truth. Those of us who have toiled for years advising, counseling, and preparing our clients for homeownership have known this program to be one of the finest loan programs available for first time homebuyers in this or any market.
We extol the virtues of this program because it is NOT a means to avoid showing underwriters the truth, the whole truth, and nothing but the truth, but the opposite. The reason FHA will NEVER become the “new” subprime is because everything is verified.
All aspects of FHA mortgages are meticulously verified.
- The borrower’s income is verified.
- The borrower’s assets are verified.
- The borrower’s credit is verified.
- The appraisal is verified and underwritten.
- Social Security numbers are verified.
- Dates of birth are verified.
- Borrower’s are checked against a list to ensure they have not defrauded the government or failed to live up to prior agreements with the government.
It is true that opportunities in the underwriting standards allow the consumer to explain blemishes or situations that do not fit into the norm. These explanations must be reasonable and documented. This is the first and most direct opposition to a comparison with “subprime” mortgages. Most of those programs did not require such scrutiny of the borrower or their finances. Many of the homeowner’s, who lost their homes, were not properly advised when they were placed into mortgages they could not reasonably afford. FHA has checks and balances to avoid these indiscretions.
The broad blanket that many cast as a means of comparing FHA and “subprime” does the FHA loan program a horrible injustice. FHA mortgages have helped many homeowners realize the dream of homeownership. Will there be foreclosures that come from people who have FHA mortgages? Unfortunately, yes. There will always be circumstances that lenders, underwriters, and appraisers cannot anticipate. Life has a nasty way of reminding this from time to time.
Many Americans will benefit from and because of FHA mortgages. I am proud to serve those wish to take the next step on getting their piece of the American dream. Wisconsin homebuyers, more specifically buyers in WalworthCounty, in places like Delavan, Lake Geneva, Elkhorn, Williams Bay, and Walworth should know there are many qualified lenders who can and will assist you both honestly and ethically.
S. Shore Dr & Highway 50
Delavan, WI 53115
(262) 728-4203
(262) 745-5055 – Cell
