Until about a year ago not many lenders were FHA Direct Endorsement lenders but it didn't really matter...because only about 5-6% of all loans were FHA loans. In June of this year FHA and VA loans accounted for nearly 36% of all mortgage applications, the highest rate since 1990!
The explosive growth of FHA mortgages was largely the result of the demise of 100% conventional financing. FHA has once again become the loan of choice for many buyers as it requires only a 3.5% down payment. But the system has become clogged because of the sudden increase in FHA loans, making the approval process through HUD very slow.
This is where Direct Endorsement can make a big difference...it's a matter of time. Lenders who have been approved by HUD as Direct Endorsement lenders can consider single-family FHA mortgage applications without first submitting paperwork to HUD...which means that FHA mortgages can be processed as rapidly as other mortgages. Having a Direct Endorsement lender can cut weeks off the loan approval process.
If you are a buyer you should know that some foreclosure properties require a Direct Endorsement lender for consideration of an FHA mortgage. Even if not required it can give you an edge, especially in multiple bid situations. If you are looking for a quick closing it can make a huge difference...meaning the difference between closing on time and having closing postponed because of financing delays.
Sharlene Hensrud, RE/MAX Results - Email - HomesMSP.com
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