Tag: derogatory credit

“Account Paid for Less Than Full Balance” Foreclosure or Short-Sale?

Question: On a previous home, our client was heading toward foreclosure but was able to short sale the home.  The credit report states “Account paid for less than full balance; account paid after Foreclosure started”.  Is this considered a short sale or a foreclosure? Answer: This is treated as a short sale because the mortgage […]

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USDA – Updates to Chapter 10 and Chapter 11

Written by: David Hail, Staff Writer USDA lenders, this is a massive update so heads up.  Our expert breaks down the “New”, “Clarifications” and “Reminders” announced by the agency. Rule Synopsis: The great news is that the revisions to Chapter 10 “Credit Analysis” and Chapter 11 “Ratio Analysis” USDA Rural Development announced were coming in […]

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FHA Requirements for “Charged-Off” Accounts

Question: My client has a charge-off from several years ago.  Is this required to be paid off prior to closing? Answer: No.  A charged-off account would not need to be paid off unless it reappeared as an active collection, and then it would depend on the circumstances.  See the full guideline below. Reference:FHA Handbook 4000.1 […]

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USDA – Major Revisions to Chapter 10 – Credit Analysis

Written by: David Hail, Staff Writer The revisions to technical handbook HB-1-3555 Chapter 10, Credit Analysis, are significant and require your full attention if you are originating these types of loans. Rule Synopsis: On December 19, 2019 USDA Rural Development announced upcoming revisions to technical handbook HB-1-3555 Chapter 10, Credit Analysis. They provided an advance […]

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Date Used for Derogatory Credit Waiting Period

Question: We are working on a conventional refinance where the borrower had a derogatory credit event.  To ensure that we meet the seasoning period required by Fannie Mae, what is the date that they use for the waiting period? – Mortgage Currentcy – Derogatory Credit Wait Periods Chart Answer: Per the requirements of B3-5.3-07, Significant […]

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