FHA Proposes Greater Flexibilities 4 Borrowers Using Rental Income from boarders

[Bobby Bucks]

I generally ignore and trash the egghead laden emails from the alphabet soup people, but this one from FHA got my attention. If you have a friend or relative who is borderline on qualifying for a home loan, this may possibly help. This draft ML proposes greater flexibilities for borrowers using income received from individuals who rent space in borrowers’ homes, referred to as boarders in Single Family Housing Policy Handbook 4000.1, to qualify for an FHA-insured mortgage. These proposed flexibilities include revisions to the required underwriting standards for documenting and calculating this type of income.

https://www.HUD.gov/sites/dfiles/SFH/documents/Draft_ML_Boarder_Income.pdf

 

[Non Sequitur]

Oh boy, I'm sure a certain AMC will start demanding boarding income annualized in 1007 forms now. Can't wait to see their chief appraiser make a podcast explaining how to do it.

 

[Mark K]

I can see it now..."Hey Brother and Sis, sign this form saying you are each paying me $500/month for a room so I can qualify for a mortgage." LOL!!

No chance for fraud here!

Jeez, anything to loan money to unqualified borrowers. What's next? "Hey Dad, F/F says you can give me some of your FICO points so I can get a taxpayers backed loan? How about 'gifting' me 150 points?"

NINJA loans are right around the corner.

 

[Bobby Bucks]

Oh boy, I'm sure a certain AMC will start demanding boarding income annualized in 1007 forms now. Can't wait to see their chief appraiser make a podcast explaining how to do it.

Didn't he say just take the yearly total and divide by 12?

I can see it now..."Hey Brother and Sis, sign this form saying you are each paying me $500/month for a room so I can qualify for a mortgage." LOL!!

No chance for fraud here!

Jeez, anything to loan money to unqualified borrowers. What's next? "Hey Dad, F/F says you can give me some of your FICO points so I can get a taxpayers backed loan? How about 'gifting' me 150 points?"

NINJA loans are right around the corner.

I just hope there will be some who can benefit from it and buy a house. Bidenomics has made it nearly impossible for millions and many have given up on the American dream. I'm surprised there isn't more fractional ownership going on with purchases.

 

[Mark K]

I just hope there will be some who can benefit from it and buy a house.

"Buy" a house is one thing. Paying for it is another and this program/scam will allow/encourage rampant fraud. Real estate brokers and loan officers will be explaining exactly how to get the unqualified 'buyer' approved for a mortgage that they will, in all likelihood, be unable to maintain payments.

Gotta keep that housing train rolling somehow, otherwise the US economy will derail.

 

[TerryRohrer]

Nothing like a government solution that will exacerbate the problem they claim to be solving. Inflation Reduction Act 2.0!

 

[George Hatch]

We don't have RE bubbles. We have financing bubbles.

 

[Bobby Bucks]

"Buy" a house is one thing. Paying for it is another and this program/scam will allow/encourage rampant fraud. Real estate brokers and loan officers will be explaining exactly how to get the unqualified 'buyer' approved for a mortgage that they will, in all likelihood, be unable to maintain payments.

Gotta keep that housing train rolling somehow, otherwise the US economy will derail.

Very true, the powers that be will do anything to keep that train moving. The worst fraud I've experienced is with the FHA Reverse Mortgage closeouts. I've had far too many assignments where the subject is C6 condition and hazardous to even go on the porch. Sometimes I'll have a copy of the OA if they ordered a 2055 first and it's incredible how they gave it a C4 or even C3 condition rating 5 years before. The math isn't difficult to see how much the scam is. I've never understood why they don't pursue the scammers. The Soprano FHA episodes should have included an episode on reverse mortgages.

 

[TerryRohrer]

We don't have RE bubbles. We have financing bubbles.

Which are becoming "policy"!