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FHA Announces Several Underwriting Changes

By
Real Estate Broker/Owner with Cherry Wings Realty 6502373398

 

FHA Announces Several Underwriting Changes

If you are thinking about purchasing a home, you will need to know a few of the new changes that FHA has in place, starting April 1, 2012.


There are many types of home loan programs out thre, be sure to consult with your lender to see which product fits your needs the best.


FHA recently announced several changes that will impact underwriting in several areas. These changes are effective April 1, 2012.

Here's a quick summary of these changes:

For self-employed borrowers: P&L statements are now required if the last business tax return is more than 3 months old; in addition, statements must be audited if P&L income is greater than the two year average, and the higher income is needed for qualification purposes. If the two year average income is sufficient for qualification purposes, the P&L is still required, but does not need to be an audited one.

For loans with disputed accounts that receive an "Accept" by TOTAL: These are not required to be referred to a DE underwriter for review as long as the total amount of combined balances (1) does not exceed $1,000 and (2) the dates of last activity are older than 2 years. If singular or combined balances total more than $1,000 they must be paid in full at or prior to closing, or provide proof of payment arrangements with 3 months of payments verified.

For collection accounts: If the total balances of all collection accounts are less than $1,000, the borrower is not required to pay them off as a condition of approval. If singular or combined balances total more than $1,000 they must be paid in full at or prior to closing, or provide proof of payment arrangements with 3 months of payments verified. Judgments must be paid unless payment arrangements have been made and 3 months of payments are verified.

For definitions: The following are now included in the definition of family member for the purposes of Identity of Interest transactions: Brother, Stepbrother, Sister, Stepsister, Uncle, and Aunt.


Posted by

Christine Stalsonburg, Broker/Owner

Cherry Wings Realty

 

 

231-409-4140

 

 

 

 

 

 

 

 

 

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Comments (5)

Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the information. I will bookmark this post and share it with others.

Mar 24, 2012 10:07 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

As you already know, change is a constant in all mortgage lending today. Some of these will benefit the consumer, but many of then won't. The increase in fees, is certainly not a benefit.

Thank you for sharing the post with all of us.

Mar 24, 2012 10:25 PM
Cherry Wings Realty
Cherry Wings Realty - Traverse City, MI
Your Traverse City Michigan Realtor

Gita:

You are welcome.  Always like to share thigns that are changing in our industry.  Seems like it is always something.

 

Christine

Mar 25, 2012 12:22 AM
Marney Kirk
Cummings & Co. Realtors - Towson, MD
Towson, Maryland Real Estate

Christine, this is great information for buyers. These new guidelines may especially affect self-employed borrowers, who really need to know what they have to produce in order to get a loan!

Mar 25, 2012 10:14 AM
Cherry Wings Realty
Cherry Wings Realty - Traverse City, MI
Your Traverse City Michigan Realtor

Marney:

Indeed, self-employed borrowers will have a few more guidelines to adhere to for their loans.

 

Have a great week.

 

Christine

Mar 25, 2012 07:50 PM