Tobias Team at Fairway Independent Mortgage Corporation

(480) 626-2202
2325 E. Camelback Road #100
Phoenix, AZ 85016
Arizona's #1 FHA Lender (2014)
NMLS #221602 | FIMC NMLS #2289

Apr 09 2012

FHA Putting Brakes on New Collection Guideline

FHA issued a new mortgagee clause on February 28th, 2012 that could really put a damper on our housing market. The new guidelines state that any borrower that has a cumulative amount of unpaid collections of $1000 or more reporting on their credit report must either have them paid off prior to closing or in a 3 month repayment plan. This repayment plan must be evidenced by 3 months cancelled checks to prove the borrower is indeed repaying their debt and the monthly amount must be added into their qualifying ratios. Many clients have old collections, particularly medical and this will greatly impact their qualifying. Not to say repaying your debts is a bad thing, trust me I agree, but changing this guideline in the middle of a recovering market may not be the best course of action. This policy was supposed to go into effect April 1st but FHA has put the brakes on the roll out date and pushed it back to July 1st, 2012. This postponement provides us adequate time to forewarn clients and for borrowers to start repayment plans now so they are ready to close in July.

Because FHA is still a big piece of our market recovery, and a VERY common first time buyer program, make sure that you as a future borrower find out now where you stand with regard to your credit, so you are ready when the time comes to buy. For a no-cost and quick pre-approval contact the Tobias Team at 7 days a week

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