Uncommon Common Sense from FHA regarding Consumer's Disputed Credit

Uncommon Common Sense from FHA regarding Consumer's Disputed Credit

FHA has issued new guidance to the Homeownership Centers on the treatment of borrowers with disputed accounts on their credit reports.

For FHA loans the dispute status does not need to be removed if the account is any one of the following:

1. The disputed account has a zero balance
2. The disputed account is marked as "paid in full," or "resolved"
3. The disputed account is both
          a. less than $500.00, and
          b. more than 24 months old

This is great news for Lenders, Realtors and borrowers and should make it easier for borrowers with old and paid off disputes or old accounts that had been disputed to get FHA financing.