FHA Loans are fast becoming the premier alternative to traditional Alt-A and Subprime mortgage products. With conventional FNMA/Freddie loan standards tightening up and non-conforming products basically a thing of the past, serious loan officers will be well rewarded by proactively making
origination their core focus moving forward.
Fortunately, the transition from a conventional mortgage specialist to an FHA Loan Expert doesn’t need to be a drawn out process. It is true that originating FHA Loans does require a unique set of origination skills, however, it’s no more difficult once you learn the rules.
The problem is that most of the readily available FHA Loan origination resources as well as the free training courses offered by wholesale lenders are an overview at best. To truly master the FHA Loan origination game, successful LO’s must gain an edge in this increasingly popular niche by truly becoming an expert. This means packaging their deals correctly, fully understanding the unique differences between conventional and government loans, knowing the pitfalls and common deal breakers, along with the tips to get otherwise dead deals closed. This type of insider knowledge is only gained through years of experience with FHA.
Fortunately, there are a few credible FHA Training Courses on the market, written by expert FHA Loan originators in the field. However, many Loan Officers keep these manuals to themselves.
There is a giant misconception that FHA is absolutely cut and dry; black and white. Afterall, these are conservative government insured loans. But the real secret that successful FHA Originators understand is this: the real money is made in the grey area.
Most loan officer training courses simply re-hash underwriting guidelines, aka the black and white part of FHA Lending. Having a complete understanding of these rules is an absolute necessity for FHA success. However, real lending professionals realize that there is much more to FHA Lending.
Real success in FHA Lending requires two main skills. First, a loan officer has to know how to avoid some of the major pitfalls of FHA Lending. There are recurring issues that cause DU and LP approved loans to die in underwriting. Not only do these cost the loan officer their commission, they can also leave him or her with hundreds of dollars in invoices (Appraisals, Inspections, Credit Reports, etc).
Secondly, A loan officer needs to master manual underwriting. This is really where an FHA professional shines and is also something guidelines hardly acknowledge. Mastering the manual underwriting process is the real ticket to FHA origination success, but requires an absolute knowledge.
Most Loan Officer Training Courses barely touch on the subject on manual underwriting, because they just rehash guidelines. Make no mistake the difference between mediocrity and real success is in the grey area.