Back in April of this year HUD implemented a new credit rule requiring that all collections and or disputed accounts over $1,000 (including medical bills) be satisfied prior to being eligible for a new FHA loan. Well, the blowback from that decision started immediately, for obvious reasons, and shortly thereafter HUD decided to take another look at that policy.

Well, on June 15, 2012 HUD released "Mortgagee Letter 2012-10" which rescinded in its entirety the previously released "Mortgagee Letter 2012-3" regarding disputed accounts and collection accounts as well as judgments and is effective immediately. Bravo HUD!!

This will certainly help many of those folks previously made ineligible for FHA backed financing because of an overly restrictive policy. It's nice to see that the US government listened to and responded appropriately and in a timely manner to a legitimate concern. Time now to revisit some of those old leads that had been DQ'd by that April policy!