One way for borrowers to screen lenders is to ask them if they are direct FHA lenders. If they are not and they sell the FHA loans they originate to other lenders and banks, then there may be additional qualifications added on to the FHA’s qualifications.
Denver, CO (PRWEB) January 20, 2014
Christian Durland, a Centennial, Colorado-based mortgage expert, reports that although the Federal Housing Administration (FHA) originally opened the Back to Work Program in August, it has not taken off as quickly as many expected and that could be the result of many of the lenders offering the program, overlaying their own more restrictive qualifications onto the program’s original requirements.
The Back to Work Program is geared toward those who were victims of the Great Recession and lost their homes to foreclosure or short sale as the result of a job loss and/or loss of income associated with the economic downturn. Typically, these former home owners would have to wait three years before qualifying for financing if they experienced a foreclosure, and two years if they filed bankruptcy. Now, Colorado renters who have rebounded and gone back to work, can buy again after experiencing a foreclosure, short sale or bankruptcy filing in as little as 12 months.
Qualifying applicants will need to document their job and income loss as being a direct result of their short sale, foreclosure or bankruptcy. This can be done with written verification of employment, or VOE, with date and the amount signifying a drop in income clearly stated. Another option is a signed tax return or W-2 that proves loss income in the household.
These qualifications have been put forth by the Colorado FHA Back to Work Program, but individual lenders may pile on their own qualifications as they see fit. Borrowers should be wary of this practice as it is the federal government that assumes the risk of these loans should the borrower end up defaulting, not the lender itself.
“This leaves it up to the mortgage lender to potentially overlay additional qualifications and loops for the borrower to jump through in order to be accepted into the Back to Work Program,” Durland said.
However, Durland adds that potential borrowers should not be dissuaded, as there are lenders who do not overlay additional qualifications and offer the Back to Work Program as is.
“One way for borrowers to screen lenders is to ask them if they are direct FHA lenders,” Durland stated. “If they are not and they sell the FHA loans they originate to other lenders and banks, then there may be additional qualifications added on to the FHA’s qualifications.”
Potential borrowers who have been denied acceptance into the FHA’s Back to Work program are encouraged to try again with a different lender, especially if they already meet the qualifications put forth by the FHA. There are plenty of lenders out there who are ready, willing and able to issue a loan that’s been insured by the federal government and is designed to help potential home owners who might not otherwise be approved for a loan.
About Christian Durland:
As a well-established mortgage advisor with extensive knowledge of the intricacies of Colorado mortgage planning, Christian Durland’s decade-plus of experience in his field has also allowed him to develop an elaborate network of Denver-area real estate professionals whom he can refer clients to, based on specific mortgaging needs. Operating outside of the conventions of simple real estate transactions, Durland prides himself on his ability to guide borrowers through every step of the home buying process in order to help maximize their savings. It’s his success in these endeavors that has won him a reputation for being a trusted figure and foremost authority in the Colorado real estate community. Durland is also a multi-time recipient of the locally coveted 5280 Denver’s Magazine’s “Top Mortgage Professionals Award”, which is awarded to Denver’s most elite mortgage bankers and brokers annually.