Washington Report

Advocacy Updates from Washington D.C.

Underwriting Changes Announced for FHA; Includes Collections and Judgments

April 2, 2012

The US Department of Housing and Urban Development (HUD) announced Mortgagee Letter 2012-3, Miscellaneous Underwriting Issues for loans insured by the Federal Housing Administration (FHA). The Mortgagee Letter changes requirements for borrowers with individual or multiple disputed credit collections. Borrowers with a singular or cumulative balance over $1,000 must resolve the accounts prior to or at the time of closing. Resolution can be paying of the debt or establishing payment arrangements with a minimum of three months of verified payments made. This guidance goes into effect on April 1, 2012, and REALTORS® should work with clients early to ensure this issue is addressed prior to closing. The letter also makes changes to 1) year-to-date profit & loss statements and balance sheet requirements, and 2) the definition of family members.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.