FHA Back to Work Program

FHA Back to Work Program

August 15, 2013 FHA Mortgagee Letter 2013-23 brought forth the most significant, and aggressive, expansion of guidelines in mortgage financing since the collapse of the housing market.  Finally, instead of penalizing consumers and former home owners for the extraordinary recession that started as early as 2006, FHA has reduced the seasoning requirements after Bankruptcy, Short Sale or Foreclosure to as little as twelve months.

The Back to Work program is, essentially, a “Cause and Effect” loan program.  The program is based upon the precept that unforeseen and unprecedented economic factors outside of the borrower’s control contributed to the “event” (bankruptcy, short sale or foreclosure) and that circumstance may have no relevance to the borrower’s ability and/or desire to repay a mortgage.

As a direct lender, we are doing the full FHA Back to Work program with no overlays.  That said, this program is not a "check the box" type of loan and each file will have to stand on its’ on merits.  Automated underwriting systems will not read the file correctly and virtually every loan will be manually underwritten.  In my opinion that is a very good thing because it will allow me and my clients to "tell their story" and document each file to ensure success in underwriting.

That said, given the vagueness in the content of this mortgagee letter from FHA, I believe there is going to be a considerable amount of variance in the execution of the program from one lender to another.  To a degree, the program is subject to underwriting opinion...and underwriting opinion is usually based upon the completeness of the file.  Far too few originators truly understand the concept of "packaging" a loan for submission.  As a result, I expect to see a rather high declination ratio on the program.

The best advice I can offer any potential home buyer is to choose your lender for the Back to Work program very carefully.  All FHA loans require registration with FHA through a case number.  Once a FHA file is notated "declined in the system the decision will follow the file, even if transferred to a different lender.  Taking it one step further, all FHA underwriters are DE certified and, as such, are somewhat like members of a Sorority.  It is very difficult to reverse the course once a FHA loan has been formally declined.  Not impossible, but challenging to say the least.

FHA Back to Work Program Benefits

Low Down Payment
Less Than Perfect Credit Needed to Qualify
FHA Conforming Loan Limits
Full Underwriting approval on TBD (to be determined) files

Deborah Garvin
NMLS #279125
WJB Temecula Home Loan Center
43620 Ridge Park Drive, Suite 210
Temecula, CA 92590

Office:  951.795.4547     Cell:  619.787.8212  Email:  deborah.garvin@wjbradley.com

W.J Bradley Mortgage Capital, LLC, 43620 Ridge Park Dr. Suite 210, Temecula, CA 92590. W.J. Bradley is not affiliated with your current lender. The loan information used in connection with this offer was derived from Overflow Works. This offer is made by W.J. Bradley Mortgage Capital, LLC. This is not a commitment to lend. All approvals are subject to underwriting guidelines. Underwriting guidelines include but are not limited to: acceptable credit and income history, current homeowners insurance, etc. and does not include escrows. The monthly principal and interest payment amount is based on your original loan amount and assumes an interest rate and payment term as quoted.

 © 2013 W.J. Bradley Mortgage Capital, LLC. 6465 Greenwood Plaza Blvd, Suite 500, Centennial, CO 80111 Phone #303-825-5670. NMLS ID 3233. Trade/service marks are the property of W.J. Bradley Mortgage Capital, LLC. This is not a commitment to lend. Restrictions apply. All rights reserved. Some products may not be available in all states. WJB is not acting on behalf of or at the direction of HUD/FHA or the federal government. All Borrowers and properties securing Mortgage Loans must be approved by WJB. Loan terms subject to change without notice. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act RML No. 4131002. This advertisement references the FHA Back to Work Program.