05/25/2024
I currently live in the state of Oregon. One of the most beautiful states in the country. The picturesque coastlines. Sandy Beaches, The mountains, it is great . However it is one of the most costly places to live. And there really isn’t any reason for it other than Greed.!
Everywhere you look there are new apartment complexes going up. Developers and their investors know that with home ownership beyond the reach of most blue coller workers they can charge enough to keep occupants barely scraping by. That they will never be able to save up enough money to leave or for a downpayment on a home. Just in case they do the lenders will be sure to stop that from happening.
The FHA says that with a credit score as low as 580 yo can get approved for a home loan . That is not true. Because the FHA allows lenders to pile on what is called overlays. This means that the lender can require you to have a 620 before they will even consider a home loan on a existing home. Manufactured home and property you need a 640 credit score. To build a brand new home you need a credit score of 720 or higher. And all of these scores are the middle score. Because lenders look at all three bureaus they throw out the high score and the low score and take the middle. fha Guidelines are fairly simple and straight forward. Lenders will tell you that they are following the FHA guidelines, however if you ask them for a copy of that guidelines that is putting the brakes on your loan . The lender will say they are under no obligation to share that with you. In short it is another overlay. And heaven help you if part of your income is from a trust or settlement. Lenders are able to apply these Overlays because the Federal government allows it. Lenders agree to offer FHA loans so they can put that big FHA logo in there adsvertisements and marketing. Beware though because most of the time you are not even dealing with a lender but a mortgage broker who has to make your package marketable so he sale it to a real lender. Best advice is to avoid a broker they will tell you anything. Probably even lie to their own mother.
FHA loans are guaranteed by the federal government to attract lenders and minimize their losses in the event the borrower defaults on the loan, yet no one has been able or willing to share what percentage of the loan they guarantee. I would imagine that it is around 85%. Just think if 70% of those who live in apartments were to leave the state, all those greedy developers and apartment management companies would be forced to get real about the rates, or go bancrupt, Oregon would lose a considerable amount of tax revenue they would not be able to support the states infrastructure nor would the affected cities.
The show American Greed should do a special here.
