Sunday, June 29, 2014

20014 Kentucky FHA Loans and Collections. How are they treated for a loan approval?

Kentucky FHA Loans and Collections. How are they treated?




Collections

  • If the sum of the borrower's Collection Accounts total less than $2000, then payments for these accounts do not have to be analyzed.
  • If the sum of the borrower's Collection Accounts total $2000 or more, then payments for all accounts must be analyzed and included in the DTI.
  • Collection Accounts can be paid off in full to avoid including the payment in the DTI.
  • If no evidence of monthly payment can be found for a Collection Account, 5% of the outstanding balance will be considered as payment for calculating the DTI
  • Collection Accounts of a Non-Purchasing Spouse in a community property state are included in the sum total unless state law otherwise excludes it.
  • All medical collections are excluded from the sum total.

**Note**: All Collection Accounts on the credit report will be considered unless exempted above. FHA will continue to consider them in the $2000 calculation, even if paid off, until new credit is uploaded with the Account updated/removed.

Joel Lobb 
Senior  Loan Officer
(NMLS#57916)



 phone: (502) 905-3708
 Fax:     (502) 327-9119
kentuckyloan@gmail.com

 Company ID #1364 | MB73346
http://mylouisvillekentuckymortgage.com/