Jennifer Harmon of National Mortgage News discusses the impact of the large increase of FHA lending on the mortgage industry with Dennis Hedlund, founder of iEmergent.  Hedlund cautions lenders against "expanding as fast as possible to become trained and certified FHA underwriters" leading to "rapid expansion, but no product differentiation."  FHA transactions and "the borrower requirements and work to complete [them] is much more work than a lot of loan officers are used to.  Some have never known the documentation environment."  The article emphasizes that "lenders still need to be aware of where the possibilities are for having quality loans," and that the lenders -- large or small -- that will be the most successful are those that "know a lot about their markets." Rather than assume that FHA programs will provide transactions to make quick money, they need to start to "build relationships from the bottom up in local markets," even though that is much more difficult now with "the negative attitude many consumers have toward the banking and mortgage businesses."   

The complete article is available in the February 16, 2009 issue of National Mortgage News.