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New mortgage guidelines affecting people with good credit?

I am in the process of shopping for my first house. My original pre-qualification was in January, for a conventional 30 year fixed loan. I'm hoping to make an offer this week, so I called my lender to be re-considered for pre-qualification (original 30 day period had passed). I was told that mortgage guidelines had changed in January, and because I did not have 3 open lines of credits on which I had made monthly payment for the past year, I no longer qualified for conventional and had to do an FHA loan. I inquired if this new policy from coming from my lender or if this was industry wide and was told that "no reputable lender would violate this policy." I do not have any student loans or car loans and have only two credits cards (one for personal one for business), both of which get paid off every month. I also have a very solid credit score (780). I'm having a hard time wrapping my mind around the logic here, as it seems to penalize people who are fiscally responsible and do not carry any debt. I have had (and paid off) loans/credit lines in the past (hence the good credit score), so I'm pretty frustrated by these new rules. Has anyone else run into this?? Any insights would be greatly appreciated. by drdave1959 from Boston, Massachusetts. Mar 9th 2010 Reply


Leo Namiot (leolends)
#44 ranked lender in Florida - 13 contributions

Not sure why it would be apoproved 2 months ago, if they did a full pre-approval and ran it through desk top underwriting then it should have given them the answer then. What is the LTV? (loan to value), The benefits to FHA is that you can go up to 96.5% LTV , the morthly mortgage insurance is less than conventional and the rates are better going with FHA. Why would you be opposed to FHA unless you are putting 20% down? Youir lender seems to have dropped the ball. Let me know if I can help? www.LeoLends.com 1-866-334-5626 Toll Free Direct Number

Mar 9th 2010
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Sean Wheelan (Sean Wheelan)
#2 ranked lender in Rhode Island - 8 contributions

drdave, These guidelines have been in place for a while, and I think the original lender just didn't do a thorough job on your file...FHA allows for non-traditional trade lines, so we can potentially make it work. And frankly, if you are putting less than 20% down, FHA tends to be the better option. If I can be of service, just let me know.Sean WheelanDivision Manager401-965-9384swheelan@tmgltd.bizIndividually Licensed in MA/RI/CT

Mar 9th 2010
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J Martin (jmarr91)
#10 ranked lender in Georgia - 25 contributions

Based on your scenario, you should not have a problem getting a Conventional loan. I would definitely go to another lender.

Mar 10th 2010
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