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FHA Buyers MUST Include Spouse’s Credit; Why Our Broker Channel Remains Better than Our Direct Lending Channel

Married FHA buyers MUST provide their spouse’s credit too, no matter what the circumstances are. We often get married buyers who want to get FHA financing on their own, but are precluded from doing so b/c their spouse’s credit is so bad or b/c their spouse has so much debt that debt ratios are pushed too high. This is the case even if the buyer has been separated from the spouse for 20 years.

Broker vs. Bank? We used our warehouse line to function as a “Direct Lender” for most of 2008 and 2009. But in about July of 2009, we noticed that all of our “Wholesale/Broker” Lenders had much better pricing (lower rates) than our “Correspondent Lenders”. The reason was twofold: Investor Demand for “Broker Originated Loans” had returned with a vengeance, and large banks discovered that the “Broker Channel” was extremely profitable (so major banks began fighting tooth and nail for more broker business).

As it stands now, our Broker Channel crushes the pricing we can offer as a Direct Lender. This benefits Borrowers and Realtors b/c: (1) our rates are almost always lower than those offered by major retail banks; (2) we can shop rates among 50 lenders to ensure we offer the lowest rates at any given time; (3) we can shop “turn times” in an effort to offer timely closings; and (4) we can shop “underwriting guidelines” too, as they vary tremendously from lender to lender with respect to allowable debt ratios, credit scores, seller-credits, etc.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167