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***More FHA Changes Effective 04/01/2012
Per FHA Mortgagee Letter 2012-03, FHA will be adopting a few more changes effective 04/01/2012. One of the changes is regarding collection accounts. This could impact many borrower’s ability to qualify or possibly delay a borrower in qualifying for the FHA loan.
OLD Guidance NEW Guidance
* Exception: An exception to the payoff of a court-ordered judgment may be made if the borrower has an agreement with the creditor to make regular and timely payments, and provides documentation indicating that a minimum of three months payments have been made according to the agreement. The monthly payment must be included in the borrower’s debt-to-income ratio.
Examples of acceptable documentation to support the resolution of disputed accounts or the payoff of accounts would be a letter from the creditor outlining the terms of the payment arrangements, or verifying payoff of debt, cancelled check(s), or a supplement to the credit report verifying payoff or payment arrangements.
Note: Paying “down” of balances on disputed accounts and collections to reduce the singular or cumulative balance to below $1,000, is not an acceptable resolution of accounts.
For more information please contact DOUG CAPPS at (662) 429-5100 ext. ... more
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