The no-good, very-bad market for FHA borrowers

This market was already hard enough for FHA borrowers.

Good afternoon! Was this newsletter forwarded to you? Sign up here. Hello, LOs!   This market was already hard enough for FHA borrowers. They tend to have lower credit scores, less money in the bank, and can't waive inspection or appraisal. That's a recipe for a rejected bid in a hyper-competitive market. So what happens when mortgage rates rocket up around 5% but the overall purchase mortgage market doesn't budge?    You guessed it: a really freakin' bad market for FHA borrowers.    As interest rates have ballooned over the past couple of months, origination volume of FHA loans dipped considerably.   "Over the last 90 days there has been a dramatic shift in FHA and VA originations," Randy Howell, president of Mortgage Power, told HousingWire's Maria Volkova. "We saw FHA originations drop off practically by 90%."   Multiple LOs told HousingWire that they've had to cut pre-approvals for FHA borrowers by about 15% in response to the rise in interest rates.   Mark Westcott, a loan officer at CrossCountry Mortgage, said that borrowers who were pre-qualified at 3.5% a few months prior will have to deal with the reality that they will no longer be able to qualify for the same rate.   "The only guy who isn't affected by interest rate growth right now is someone who is buying a million-dollar house, putting down 25% to 30%," Westcott said.   LOs – have you seen a big slowdown in FHA applications? How are your FHA borrower clients adjusting to this brutal market? Shoot me an email at jkleimann@housingwire.com.   James Kleimann Managing Editor, HousingWire FHA borrowers are getting hammered by rising rates Mortgage, Politics & Money, HW+ Exclusive Content A huge uptick in mortgage rates have cut pre-approvals for FHA borrowers significantly in recent weeks. With home prices still climbing, they are facing an unbelievably cruel market. The Updated Qualia Homebuyer Sentiment Index How do homebuyers find and evaluate their lenders? How can lenders ensure that they meet their borrowers' changing expectations in the year ahead?

Find out in the Qualia Homebuyer Sentiment Index.

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What does the non-QM market look like right now?

Presented by LoanScorecard

As the market shifts, interest in non-QM lending from traditional lenders and brokers has increased. We recently spoke to Bao Huynh, Director of Business Development at LoanScorecard, about these changes and the challenges of originating non-QM loans.

A good jobs report, but also another recession red flag

Politics & Money, Real Estate, HW+ Exclusive Content

Lead Analyst Logan Mohtashami explains how to interpret the latest jobs report and the inverted yield curve as he watches for a recession.

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Is the Dallas Fed right to label this a housing bubble?

Politics & Money, Real Estate,HW+ Exclusive Content

The online reaction to the Dallas Fed's statement was immediate — housing must be about to crash. Here's why Lead Analyst Logan Mohtashami disagrees.

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