Issue: Q&A – December 25, 2017

VA – Co-Signed Car Loan: If my borrower can prove that he does not pay for a co-signed debt, am I able to ignore that debt?

Answer: VA does allow for debts to be ignored in certain cases. (See the guideline below.) Expect an underwriter to require at least a 12-month history of payments from the holder of the loan in order to consider ignoring the debt. Reference: VA Lenders Handbook Ch. 4, 5-d: Applicant as Co-obligor on Another’s Loan (04/10/09) […]

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FHA – Escrow Repair: Can the sales price be increased when there is a required repair for which the seller and buyer do not have the funds to complete?

Answer: FHA will allow the increase to the sales price for the repair escrow and FHA specifically allows repair escrows in this type of situation (see guideline below). However, I must warn you that many underwriters, and the investors they work for, believe that sales price increases after an appraisal has been completed are not […]

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