What We're Hearing

In response to recent changes made by the Federal Housing Administration on some of its loan programs, wholesalers are moving to increase fees and raise FICO scores for consumers. Loan brokers will soon be passing on this "good news" to loan applicants. In short, the lower the FICO score, the more a borrower will pay. The changes apply not only to FHA guaranteed products but Veteran Administration mortgages as well. Meanwhile, industry veteran Peter Cugno's Secret! University, which runs training and education classes for loan officers (and others) is not accepting any new students for its upcoming fall and winter sessions. Mr. Cugno said he is spending much of his time these days trying to raise capital to launch what he calls a "Agency Alternative Next-Generation" subprime wholesale shop. He says getting investors to commit is a "significant uphill battle"...