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Mortgage firm touts HUD 184 loan to brokers

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PHILADELPHIA – A national mortgage firm has touted the HUD 184 American Indian mortgage as a good niche product for mortgage brokers to make.

Officials for M&T Mortgage Corp., including mid-Atlantic sales manager Julie Slack and Melissa Fedoruk, told a session of the National Association of Mortgage Brokers annual convention in Philidelphia that the Department of Housing and Urban Development’s Section 184 100 percent guaranteed Indian mortgage is a good niche loan for mortgage originators because not many other lenders are making it.

To date in 2006, M&T has made 26 HUD 184s, totaling more than $6 million in mortgage credit, Fedoruk said. The nationwide lender has closed HUD 184s in New York state, Oklahoma, California and Florida.

The session was significant in that M&T was touting the HUD 184 as a good loan to make in the regular course of business. It also offers a course on the HUD 184 on its mortgage education effort, M&T University.html). ( Another M&T official offered a seminar on the HUD 184 at last year’s Florida Association of Mortgage Brokers annual convention.

Mortgage brokers like the ones meeting here act as remote agents for big lenders like M&T, which is based in New York but has operations all over the country.

The officials had no immediate statistics on whether any of their HUD 184 borrowers were delinquent or in default.

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The HUD 184 loan is much like a standard Federal Housing Administration mortgage, but the loan limits are higher at 150 percent of the FHA limit, Fedoruk told the brokers. Plus, the actual underwriting is done not by the lender, but by HUD’s Office of Native American Programs.

The loan is available to purchase or refinance a home. It also can be used as a construction and permanent loan, or for renovations.

To date, some 3,400 of the loans have closed, including 1,000 in Oklahoma. HUD has expanded the loan to be available to Indians outside reservations or Indian areas.

According to Slack, HUD’s turnaround on the loan is “pretty quick,” but she admitted it takes longer than normal loans, usually due to title concerns.

Marketing is a challenge, Fedoruk acknowledged, saying you have to earn trust on a reservation before beginning to offer the loan. Another way is to target contractors that do business on Indian homelands.

M&T Mortgage is a unit of Buffalo, N.Y.-based M&T Bank. The parent is one of the 20 largest commercial banks in the country, with assets of more than $55 billion.