Huntsville MLS

Additional changes coming from FHA
March 9th, 2012 9:47 AM
Additional changes coming from FHA

Modify documentation requirements for self-employed borrowers.
Provide new guidance on disputed accounts.
Expand the current definition of family members for identity of interest transactions.

Self Employed Borrowers
A P&L and Balance sheet will now be required if more than a calendar quarter has elapsed since date of most recent calendar or fiscal-year end tax return was filed by the borrower - with no exceptions. Additionally, if the income used to qualify the borrower exceeds the 2 year average of tax returns, an audited P&L or signed quarterly tax returns obtained from IRS are required.

Handling of Disputed Accounts, Public Records
The mortgage application will no longer be referred to a DE underwriter for review due to disputed accounts, as long as these accounts meet both of the following conditions:
The total outstanding balance of all disputed credit accounts or collections are less than $1,000 and
Disputed credit accounts or collections are aged two years from date of last activity as indicated on the most recent credit report.

If the borrower has individual or multiple disputed credit accounts or collections with singular or cumulative balances equal to or greater than $1,000, the accounts must be resolved (e.g. payment arrangements with a minimum 3 months of verified payments as agreed) or paid in full, prior to, or at the time of closing.

Disputed credit accounts or collections resulting from identity theft, credit card theft, or unauthorized use, etc... will be excluded from the $1,000 limit under certain terms. The borrower will need to provide documentation that he filed an identity theft or police report to dispute the fraudulent charges. We will also need to provide documentation to show all disputed or collection accounts are resolved, verified as not a debt to the borrower, arrangements made for payment, or paid in full.

If the total outstanding balance of all collection accounts is less than $1,000, the borrower is not required to pay off the collection accounts as a condition of mortgage approval.

Identity Interest Transactions

The new purpose of Identity of Interest transactions, the definition of family members include:
child, parent, or grandparent
spouse
legally adopted son or daughter, including a child who is placed with the borrower by an authorized agency for legal adoption
foster child
brother, stepbrother
sister, stepsister
uncle, and
aunt

The new guidance will go into effect on case numbers assigned April 1, 2012


Keywords; Huntsville homes for sale Huntsville Alabama MLS search, Huntsville MLS Automated Real Estate Search, HomeValue and Real Estate Market Updates, Huntsville Alabama area Rental Homes, Property Management.