FHA Tightens Credit for Cash Out Refinance
Until recently, FHA has allowed cash out refinancing for homeowners up 95% loan to value if the borrowers have made their mortgage payments on time for at the prior least twelve months. The seasonally adjusted percentage of FHA home mortgages that are 90 days or more delinquent increased to 4.11%. The Washington Post recently that these instant defaults nearly tripled in the past year alone and more than quadrupled among FHA home refinancing.
FHA refinance loans now make up two-fifths of all the agency’s instant defaults, according to the Washington Post article, some lenders have singled out cash out refinance loans as especially risky. With conventional loans, many FHA lenders now offer cash out mortgage only to borrowers with high credit scores and significant equity in their homes. Read the complete FHA article > FHA Rumored to Tighten Cash Out Refinancing Guidelines
