Just as we thought lending couldn't get any tougher, it did!

FHA just announced major changes in credit requirements for new borrowers. The changes were announced in FHA Mortgagee letter 2012-3.

Disputed accounts appearing on your credit report: If you have disputed accounts, as long as the disputed accounts or collections total less than $1,000 AND the disputed accounts or collections are older than 2 years from the date of last activity, then we can proceed - if they total more than $1,000 or are less than 2 years old, the dispute must be resolved and the dispute message must be removed.

Unpaid collections: If the total of collection accounts is less than $1,000, they can remain unpaid. However, if the total outstanding collections are equal to $1,000 or more then you must resolve the accounts. Resolution includes the following options:

-Entered into a payment arrangement with a minimum of 3 months worth of payments made and VERIFIED made, "As Agreed".

-Paid in full prior to or at the time escrow closes.

NOTE: Simply paying down the collections to a balance less than $1,000 is NOT an option.

In a conversation with HUD, we have also verified the following:

- Debts owed by a non-borrowing spouse will be held to the same standard above.

- HUD also confirmed that if an account is reported as "Charged Off", yet the report stills shows a balance, the balance must be paid unless we can get the reported balance updated to reflect zero.

- HUD also confirmed that if an account reports as "Repossession", any balance reported MUST be paid off unless we can get the reported balance updated to reflect zero.

For borrowers with credit issues, it is best to contact your local Mortgage Banker/Broker as early as possible to see what issues you may be facing.

If you are located anywhere in Arizona I am happy to help you.

If you have questions, I am happy to answer them, regardless of where you live. NOVA is licensed in 19 states, from Washington to Florida.

Check us out at www. LoansA2z.com

Bert Carpenter, CRMS

NMLS 40586 ~ AZLO 0911876

Nova Home Loans ~ NMLS 3087 ~ ALBK 0902429
An Equal Housing Lender