Good Morning!
Just when you thought mortgage guidelines were beginning to relax a bit FHA tightens the screws on it’s loan.
One of the great reasons people used FHA as a mortgage was that is was a friendly loan if you had some “dings” in your credit.
…mainly FHA didn’t care about collections – particularly older collections, or medical collections.
This is going to change big time at the end of March 2012.
The big change is this… If your collections ad up to $1,000 or more then you have to pay off ALL of your collections.
…This includes medical collections.
The only way around paying them off is if you can show you are on a payment plan with EACH collection, and that you have been making payments for at least 90 days.
This is going to have a major impact on the housing industry. It will probably cut in half the number of people who would qualify for an FHA loan.
Conventional will be able to absorb some of these borrowers, but not all of them.
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Thanks for reading, and have a great day!
Brett