Nationwide Mortgage & Realty, LLC
Tel: 844-953-0100 Email: info@nationwidemtg.net
Friday, March 24, 2023

Nationwide Mortgage & Realty, LLC

Fast Quote
  • Home
  • About Us
    • Career Opportunities
    • Contact Us
    • Meet the Team
  • Purchase
    • Conventional Mortgage
    • Condotel & Non-Warrantable
    • FHA Loan
    • FHA 203k
    • Fix & Flip
    • Investment
    • Jumbo Loans
    • New Construction
    • Non-QM Loans
    • USDA Loans
    • VA Purchase Loan
  • Refinance
    • Cash Out & Debt Consolidation
    • Conventional Refinance
    • Condotel & Non-Warrantable
    • FHA 203k
    • FHA Streamline Refinance
    • Investment
    • Non-QM Loans
    • Reverse Mortgage
    • VA IRRRL (Streamline)
  • Loan Process
    • Application Checklist
    • Credit Repair
    • Home Buying Do’s and Don’ts
    • Interest Rates
    • Mortgage Calculator
  • Mortgage Blogs
  • Request Information
    • Apply Now
No Result
View All Result
Contact Info | Request Info
Home FHA Loan

FHA Charge Off Guidelines and Collection Accounts

byNicholas Auriemma, NMLS# 1455001
4 years ago
inFHA Loan
FHA Charge Off Guidelines and Collection Accounts

FHA Charge Off Guidelines and Collection Accounts

Do you know that some lenders have tougher guidelines than others when it comes to FHA loans? FHA collection guidelines and FHA charge off guidelines can be confusing. FHA guidelines vary by lender and working with a lender that does not have an internal guideline on top of FHA guideline will minimize the chance of a loan denial.

FHA Charge Off Guidelines

An explanation of charge off accounts does not need to be explained when you have approved Automated Underwriting System (AUS) findings. Charge off accounts are loans or debts that have been written off by a creditor. In some cases, disputed charge off accounts need to be removed from being disputed.

There are stipulations that require approved findings to be downgraded to a manual underwrite.

7 Reasons Why a Loan May Be Downgraded to a Manual Underwrite

  1. The file contains information or documentation that cannot be entered that can affect the insurability of the mortgage.
  2. The bankruptcy discharge date is within two years.
  3. Foreclosure, short sale, or deed-in-lieu date within three years.
  4. Undisclosed mortgage debt.
  5. In some cases, disputed derogatory credit, which can be removed before pulling credit.
  6. Mortgage trade lines showing a certain amount of lates in the past 12 months.
  7. Other factors listed on the findings determining the loan needing to be downgraded to a manual underwrite.

An experienced Loan Originator will go over the findings before issuing a pre-approval letter to prevent any unforeseen circumstances during underwriting. Manual underwriting views charge off accounts differently than approved findings.

Charge Off Accounts and Manual Underwriting

When there is a history of charge off accounts, an underwriter will require an explanation for approving the mortgage with supporting documentation from the borrower. An underwriter will consider if the charge off accounts were:

  • A disregard for financial obligations.
  • Inability to mange debts.
  • Extenuating circumstances.

The best way to find out if you qualify for a FHA loan is to go through the pre-approval process and run your case scenario by a Loan Originator.

FHA Collection Guidelines

With an automated underwriting approval, a borrower is not required to explain collection accounts as long as the findings do not have any stipulations that downgrade it to a manual underwrite. If the cumulative balance of outstanding collections is $2,000 or greater, the collection accounts must be determined by the following:

  • The payment arrangement will be used in the debt-to-income calculation when there is a payment arrangement.
  • If a payment arrangement is not available, 5% of the outstanding balance will be used with the debt-to-income calculation.
  • If the debt has been paid in full, the debt will need to be verified that it was satisfied.
    • The debt can be paid at closing with a payoff.

The Automated Underwriting System (AUS) is run during the pre-approval process by the Loan Originator. If the information provided is entered in correctly, there will be consistency with the final underwriting decision.

ShareTweetShare
Previous Post

Compensating Factors FHA & Compensating Factors for VA Loans

Next Post

Fix & Flip Loan & New Construction Loan | Qualifying for a Line of Credit

Nicholas Auriemma, NMLS# 1455001

Nicholas Auriemma, NMLS# 1455001

Nicholas Auriemma is a Loan Originator at Nationwide Mortgage & Realty, LLC, providing information on mortgages that can often be confusing even to real estate and mortgage professionals. Borrowers can be discouraged because mortgage professionals can be mistaken due to guidelines always changing, the extent of guidelines, their company having an overlay (stricter guideline), or other lenders not offering a loan program. Call or text Nick anytime at 630-779-8430 or email at nick@nationwidemtg.net.

Related Posts

Non-Permanent Resident Alien Mortgage Options Vs Permanent Resident

Non-Permanent Resident Alien Mortgage Options Vs Permanent Resident

January 27, 2022
When are Extenuating Circumstances Required for a Mortgage Approval

When are Extenuating Circumstances Required for a Mortgage Approval

December 23, 2019

Categories

Get Pre-Approved

Start by applying to get pre-approved today.

Recent Posts

No Income Investment DSCR Cash Out Refinance

15 to 30 Year VA Cash Out Loan Up To 100% LTV

Cash Out Condotel Refinance Loan, Rate & Term, & Purchase

3 Month Bank Statement Mortgage for Self-Employed Borrowers

Is there Still a No Doc Mortgage in 2022?

Low Down Payment Jumbo Loans with No Mortgage Insurance

Request Information | Apply Now

Corporate Address:
1 TransAm Plaza Drive Suite 300
Oakbrook Terrace, IL 60181
Phone: (844) 953-0100
Fax: (630) 953-0101
Email: Info@nationwidemtg.net

Copyright 2021 © Nationwide Mortgage & Realty, LLC
Company NMLS Unique Identifier #276777.
For licensing information, go to:
www.nmlsconsumeraccess.org.
Privacy Policy | Terms of Use

Equal Housing Lender

Restrictions may apply. All loans are subject to credit, underwriting and property approval guidelines. Nationwide Mortgage & Realty, LLC is not acting on behalf of or at the direction of HUD/FHA or any government agency. CO: Check license status of your mortgage loan originator at www.dora.state.co.us/real-estate/index.htm. Also licensed in: CA, FL, IN, TN, VA, WI and TX: NMLS ID 276777. Illinois Residential Mortgage License | MB. 6760210. WA: Consumer Loan License MB-276777. GA: Georgia Residential Mortgage Licensee 60857

  • Home
  • Request Information
    • Apply Now
  • About Us
    • Career Opportunities
    • Contact Us
    • Meet the Team
  • Purchase
    • Conventional Loan
    • Condotel & Non-Warrantable
    • FHA Loan
    • FHA 203k
    • Fix & Flip
    • Investment
    • Jumbo & High Balance
    • New Construction
    • Non-QM Loans
    • USDA Loan
    • VA Purchase Loan
  • Refinance
    • Cash Out & Debt Consolidation
    • Conventional Refinance
    • Condotel & Non-Warrantable
    • FHA 203k
    • FHA Streamline Refinance
    • Investment
    • Non-QM Loans
    • Reverse Mortgage
    • VA IRRRL
  • Loan Process
    • Application Checklist
    • Credit Report
    • Home Buying Do’s and Don’ts
    • Interest Rates
    • Mortgage Calculator
  • Mortgage Blogs
No Result
View All Result

Request Information | Apply Now
Phone
: (844) 953-0100
Email:
info@nationwidemtg.net
Nationwide Mortgage & Realty, LLC
​1 TransAm Plaza Drive Suite 300
​Oakbrook Terrace, IL 60181
NMLS # 276777
Privacy Policy

Call Now Button