Deanna Valeo

$1000 Collection/Judgment Rule for FHA Delayed Until July 1, 2012 April 10, 2012

As of Monday April 9th (yesterday) the new FHA rules for judgments and collections were to go into effect:  The new rule limits total collections/judgments not needing to be paid off to $1000 per borrower; this includes medical collections.   This limitation is a big change FHA did allow most medical collections to be ignored.  Read the entire mortgagee letter at: HUD Letter

FHA has announced that this new $1000 rule will be delayed until July 1, 2012 .vs. April 9, 2012.  This gives some borrowers with these medical collections some time to get their affairs in order.  

After July 1, 2012 a borrower may have more than the $1000 in collections/judgments; however they must be in an approved payment plan and have proof of making payments for 90-days before purchasing their new home.  Additionally these new payments will count as a new debt int he debt/income ratio.  

All in all this continues to point to tighter credit.  It is to your buyer's advantage to buy now rather than wait. 

Please make sure to have your client's prepared.  

Have a fantastic week and we will see you next week!

The Valeo-Croy Team @ New American Mortgage - Call today

Todd Croy - NMLS #91428 NC, SC (704) 488-7763
Deanna Valeo - NMLS #91421 NC, SC, VA (704) 488-1421

Accessible | Program Expertise | On-Time Closings

Due to new Federal Laws we are now providing a link to Mortgage News Daily average rates for mortgages - please see the note below regarding the rates listed.

**Please note the rates quoted are at the absolute best loan amount, the highest credit score and lowest LTVs allowed with a 1% origination fee and indicate the absolute lowest rate possible. You should use this list as a guideline and trend indicator and get a specific quote for your project (often it may be slightly higher).
Facebook link:

The Valeo-Croy Team and New American Mortgage Bankers are Equal Housing Lenders.This information is for illustration only. It does not constitute an application for a loan or an offer or commitment for New American Mortgage to make a loan on these terms. Interest rates are subject to change until an application is completed and you lock in your interest rate. The figures noted are estimates and may vary depending on discount points, taxes and insurance. Programs, terms and conditions are subject to change without notice. Mortgage loans are subject to credit qualifications. Normal credit standards apply.   Date:4/10//2012