The four firms include Prospect Mortgage, Sherman Oaks, Calif. (482 FICO minimum), RBS Citizens NA, Providence (502), Academy Mortgage Corp., Sandy, Utah (519), and Provident Funding Associates, Burlingame, Calif. (525).
The survey, however, has no qualifiers. There is no additional information on what these lenders ask in return for making a mortgage to such an applicant.
There is anecdotal evidence that some credit unions and community banks are beginning to fund mortgages that are not quite "A" credit, keeping the paper on their books.
Also, some banks will consider making lower FICO score loans as long as the applicant has substantial assets (or home equity) that can be tapped in the event of default.
Recently, Housing and Urban Development secretary Shaun Donovan said he is toying with the idea of hiking the 580 minimum FICO at the Federal Housing Administration. Then again, in today’s market very few (3% of the total) FHA borrowers are at that level.