Beware... New Lender Guideline for USDA/FHA/VA

[bigman023]

I called a lender to start the mortgage process.  This lender requires 640 for USDA. and VA.  They want 620 for FHA.  I applied in May and was short a few points.  So today was the day I decided to see if I would qualify.  My mid score is now over 640.  But about 2 weeks ago, this lender started enforcing a new guideline.  No credit report containing AU accouts will be accepted.  The guy I was working with said I would need to have it removed or go to a different lender.  He says he expects more lenders to adopt this rule.  He was nice enough to refer me to a different lender that, as of right now, does not have this requirement.

I have 1 AU account that is just 5 yrs old.  It has a 30 day late that is 4 yrs old.  They still want it gone. I always knew lenders didnt count AUs as a tradeline.  But I dont think I've ever heard anyone say they had, to have it removed.

Oh well...Just wanted to give folks a heads up on something that may become an industry  standard.

[teton]

What is an AU account?

[Walt_K]

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@teton wrote:

What is an AU account?

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AU = Authorized User.  It's when you have a card that you can make charges on but it is someone else's account.

[Anonymous]

That sounds like hogwash!  I've never heard of such a thing.  Im an authorized user on my husband's credit card.  My lender & USDA both used that account as part of my revolving debt for my loans.  My husband isnt on the mortgage loans either. 

I would walk away from that lender and take what he said with a grain of salt.  Im learning from these forums that it seems like each lender has their own set of rules.

[ShanetheMortgageMan]

This is a specific lender guideline - some will permit AU accounts to be used in the minimum trade line requirement & some will not.  Some will even require the AU trade line to be removed in order to get an accurate score without the AU account.  However most lenders still are fine with AU accounts.