FHA is the best niche. You are going to be making lots of money with FHA loans this year. FHA is the new sub-prime. This is the buzz we are hearing. Now for a little truth examine FHA. Clearly mentioned, there is some risk with FHA loans. The cash is there for the making, however if you are about to get involved in this fantastic lending niche, you should be aware of the five risks of making FHA loans.
1) Attempting to obtain into business without understanding the FHA program can be a recipe for disaster. Sign up for an FHA Training Course or buy a FHA Training Guide and read up on the program by yourself time. There's a great deal of good training programs out there (and some bad ones too so beware in what your select). Anticipate to pay $89.00 for training and approximately $500.00 for some training programs.
2) There are significant licensing and recurring compliance hurdles involved with FHA loans. You should be properly certified to offer FHA loan programs to your customers. You can be accredited as a loan correspondent (broker) or an a non-supervised mortgagee (lender). Also, you need to make certain you have the appropriate FHA disclosures all set to offer candidates for FHA loans regardless of which FHA licensing your get.
3) FHA loans must be perfectly originated and underwritten or they will be declined when you make an application for the FHA insurance coverage to be placed on the loan. You have actually heard this in the past, all your "i's" have to be dotted and your "t's" crossed in the right location when you originate a FHA loan. You will need to be sure that your FHA submissions are being reviewed by an experience DE FHA underwriter who understands the FHA program who founds the business with many years experience underwriting FHA loans.
4) Repeated offenses of the FHA loan program might lead to evaluation of civil money charges and forfeiture of your FHA license. The federal government keeps track of the efficiency of the FHA loans moneyed by your business. If your FHA loans reveal a pattern of troubles or poor underwriting that leads to substantial defaults on these loans, you could be pushed out of the FHA program.
5) A considerable requirement of having a FHA license is that you should follow an established Quality Control Plan. For the most part this means that you must assess a minimum of 10 % of the FHA loans your originate for correct underwriting, disclosures, proper appraisals. Your Quality Control group must be providing monthly reports to company management regarding any deficiencies found.