Good Morning!
FHA is finally giving us some relief on disputed accounts.
They have recently modified their underwriting guidelines regarding disputed accounts, and the automatic downgrade to a manual underwrite when disputes exist in a credit report.
Here is how the new guideline reads…
If the credit report reveals that the borrower is disputing any credit accounts, Manual Downgrade of a TOTAL Scorecard Approve/Accept recommendation is not required if:
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 less than $500, and more than 24 months old, based on the date of dispute.
This is really good news.
This means that a file doesn’t have to be automatically downgraded to a manual underwrite if the conditions are right on the disputes.
Have a good week! …and thanks for reading.
Brett