Yes, Some Lenders Still Make Low FICO Score Loans

Who says a consumer with a low FICO score can't get a mortgage? A recent survey conducted by National Mortgage News found five lenders that are willing to extend credit to borrowers with FICOs of 600 or less. The three lenders with the lowest FICO scores include TD Banknorth Mortgage, Embrace Home Loans, and Compass Bank. Do these loans wind up in the secondary market or are they placed on the balance sheet of these lending institutions? We don't know the answer to that question quite yet, but we'll be exploring the issue soon. By comparison, newly originated loans purchased by Fannie Mae and Freddie Mac have average FICO scores in the high 700s.