Starting April 1st, FHA will deny mortgages to those with credit disputes over $1000 :: Real Estate for Santa Clarita Update
Starting April 1st 2012, if you have a credit dispute over $1000 FHA will deny backing your loan until you either 1) pay it off completely or 2) agree to payment plan with them which can then throw off your debt to income ratio in itself.
So if you have an outstanding medical bill, you will now have to get that paid in full before processing your FHA loan. Or, as said above, agree to a payment plam which can mess up you debt to income ratio.
These are things to make sure you mention with your chosen lender.
Beginning April 1, potential borrowers with ongoing credit disputes totaling more than $1,000 will not be able to get a mortgage insured by the Federal Housing Administration.
The rule marks a significant belt-tightening at the FHA whereas the adminstration earlier held no such requirement that disputed credit accounts needed to be paid off. Before this rule, a direct endorsement underwriter could determine if any of the borrower’s outstanding debts should impact the approval of the FHA-backed mortgage.
After April 1, the borrower must either pay off the outstanding balance on these collections accounts or document a payment arrangement that the lender must then submit to the FHA before closing. The payment arrangement will be counted into the debt-to-income ratio for the new home loan.
Reported by: Housingwire.com
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