The Wall Street Journal runs a story about FHA tightening their
lending standards, here.
Interesting excerpt here:
"The FHA would require borrowers to have at least a 500 score
for FHA backing. At 580 and above, borrowers would be
eligible for the 3.5% down payment. But those who fall between
500 and 580 would see their down payments jump to 10%.
That, however, is still well below scores of 660 to 720 that most
lenders look for to accept only a 10% down payment. "No
lender is going to do that loan for a borrower with a 580 score
and only 10% down," says Christopher Gardner, chief executive
of FHA Pros, an FHA approval service.
For the FHA, "this change is dramatic," the quarterly report said.
Among borrowers with scores below 580, loans 90 days in
arrears, what FHA calls "seriously delinquent," have been three
times as high as those for borrowers with scores above 580, the
FHA said. Of the total FHA loan portfolio, some 6% are to
borrowers who had scores below 580 at the time of origination,
FHA Commissioner David Stevens told a House subcommittee
That "this change is dramatic" speaks volumes.