It's official: the FHA gravy train is on its way, at least for mortgage professionals. Recent legislation passed by Congress and expected to be signed by President Bush this week adds $300 billion in muscle to the Federal Housing Administration's mortgage insurance program. And LendingTree, once a veritable cornucopia of business for many mortgage brokers during the housing boom, is timing a rollout of consumer-facing tools that ostensibly allow consumers to shop for an FHA-insured loan. The company said Tuesday that users can now submit a loan request for FHA-insured loans and have banks compete for their business, and touted a new "FHA loan tool" that helps consumers determine whether they may be FHA-eligible prior to submitting their loan information request. It's an interesting shift for a company that some in the industry told HW largely made its name helping consumers locate exotic loans at the lowest monthly payment during the housing boom. "It's marketing fluff -- they're a lead aggregation service, and whatever loans a consumer qualifies for will depend on the judgment of the originator on the receiving end," said one source, a lender that has spent years working with LendingTree. "We get good quality leads from them, but everyone's trying to position themselves as offering FHA loans these days because consumers understand the government is backing the loan and think if they can qualify, they're safe." For its part, LendingTree's representatives say their new service is being done to educate consumers. "We've discovered that most borrowers are unaware of FHA-insured loans and what it takes to actually qualify for one," said Nicole Hall, editor in chief of the LendingTree smart borrower center. "In light of recent news regarding the surging popularity of FHA loans, we've set out to make the eligibility process for an FHA-insured loan a lot easier to do. The new FHA loan tool, together with our marketplace model of competing banks, provides borrowers a great package of tools and competitive offers that will help them shop for a loan in today's market." Of course, those competing banks have always had the option of quoting terms on an FHA-insured loans to consumers -- though, in the past, loans insured via the FHA largely played second-fiddle to the pricing and underwriting criteria of private-party mortgages. Which led one market participant, on the servicing side of the business, to wonder if the marketplace was sending the wrong signals to consumers. "It seems to me that originators are telling consumers that FHA-insured loans are better and safer loans, simply because the government is signing off on it," said the source, who asked not to be named. "That's really not much different than telling a consumer they'll always be able to refinance out of a mortgage before their rates increase." For more information, visit