FHA to reject borrowers in minor credit disputes
NEW YORK (CNNMoney) — The Federal Housing Administration is about to make it even tougher to borrow money from Uncle Sam to buy a home.
Starting April 1, borrowers in ongoing disputes with creditors over debts of $1,000 or more may no longer qualify for FHA-insured loans. Even borrowers with perfect credit scores can be denied over a single $1,000 problem charge.
Before this, individual lenders decided whether debt disputes constituted grounds for denial. You could be fighting a charge, say a hospital bill, and your lender might still decide that your credit history merited an approval. Now, a lender will have to justify the approval to the FHA and back its decision with documentation…..read more