· The policy change would have affected borrowers whose national credit bureau files have one or more collections or disputed-bill accounts where the aggregate amounts were $1,000 or greater. Some mortgage industry experts estimate that if the now-rescinded rules had gone into effect, as many as one in three fha loan applicants would have had.
FHA Disputed Accounts – If the credit report reveals that the borrower is disputing any credit accounts or public records, the disputes must be resolved. FHA will not allow you to close on a loan with disputed accounts unless the disputed account has a zero balance; is marked as "paid in full" or "resolved"; or has both a balance less than $500.00 and the date of the dispute is more than 24.
PDF FHA Derogatory and disputed account guidelines Matrix – FHA Derogatory and Disputed Account Guidelines Matrix. If a borrower is disputing any credit accounts or collections, the mortgage application does not have to be referred to a DE underwriter for review due to the disputed. FHA Derogatory and Disputed Account Guidelines Matrix
All credit disputes on charge off accounts needs to be removed in order for the mortgage process to proceed; Credit Disputes on charged off account is not allowed; FHA Guidelines On Credit Disputes On Medical Collections. As mentioned earlier, FHA does not require for outstanding collection accounts to be paid off.