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New Member
Posts: 5
Registered: ‎02-26-2012
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FHA and student loan default solved!!

According FHA.gov in their resources section, you are eligible for a FHA loan: if the delinquent account is brought current, paid, otherwise satisfied, or a satisfactory repayment pan is being made between the borrower and the federal agency owed and is verified in writing............................................................................................................ Don't let your loan agent dissuade you. Mine would not submit my loan because I had 6 defaulted loans. 2 which were completely paid off and 4 that were rehabbed over 2 years ago and I've never missed a payment. My agent was trying to tell me that if I ever defaulted that I could never get a federal loan again....................................................... Also I found that once you rehab your loan and a new lender picks tem up that all derogatory marks from the previous defaulted loans should be removed. The loan itself won't disappear, but all late payment marks, default marks should be removed. Balance should be zero'd out too. I just disputed these marks and Transunion an Equifax have already removed all negative marks. Experian is turning into the biggest pain in my you know what. They are making me submit the dispute in writing. ............................. After disputing this my score as jumped over 60 points. My jaw freaking dropped. I don't even need a FHA Loan now!! .
New Member
Posts: 5
Registered: ‎02-26-2012
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Re: FHA and student loan default solved!!

This is directly from FHA.gov This should help! ........ Is a borrower eligible if they have a delinquent Federal debt but have a clear CAIVRS? If the borrower, as revealed by public records, credit information, or HUD's Credit Alert Interactive Voice Response System (CAIVRS), is presently delinquent on any Federal debt (e.g., VA-guaranteed mortgage, Title I loan, Federal student loan, Small Business Administration loan, delinquent Federal taxes) or has a lien, including taxes, placed against his or her property for a debt owed to the U.S., the borrower is not eligible until the delinquent account is brought current, paid, otherwise satisfied, or a satisfactory repayment plan is made between the borrower and the Federal agency owed and is verified in writing. Tax liens may remain unpaid provided the lien holder subordinates the tax lien to the FHA-insured mortgage. If any regular payments are to be made, they must be included in the qualifying ratios. Although eligibility for an FHA-insured mortgage may be established by performing the actions described above, the overall analysis of the creditworthiness must include consideration of a borrower's previous failure to make payments to the Federal agency in the agreed-to manner and must document its analysis of how the previous failure does not represent a risk of mortgage default. Handbook 4155.1 4.A.7.f REFERENCE Handbook 4155.1 4.A.7.f REFERRAL LOCATION DISCLAIMER DISCLAIMER: All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.
New Visitor
Posts: 1
Registered: ‎11-18-2012
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Re: FHA and student loan default solved!!

[ Edited ]

Hello I just went through this last week.  My husband and I were all set to close on our home when we found out after pulling credit again right before that his student loan had gone on his credit report and was in default.  If you are in a loan rehab plan and your CAIVAR number is clear than you should be fine. His credit has since gone up 61 points to a 646 after dropping 100 points because of this.  We only needed a 620 to get approved for the FHA loan.  We have a letter saying that he has made his last 4 payments on time from the dept of education and we are bringing it to the loan meeting tomorrow.  They just want to see that the orignal date of default was not in the last year to two years. Not the date that the newst company that bought the debt. I added him to my credit card as an authorized user and that's what brought his score up so quickly. Depending on when the credit card company reports is how fast your score will go up. I added him on the 8th of november and the company reports on the 14th.  The score was showing on the 16th.  Thank GOD!  To be an authorized user you do not have to get your credit checked.

Established Member
Posts: 54
Registered: ‎12-19-2012
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Re: FHA and student loan default solved!!

Here is our situation. We are in the middle of underwriting for a new construction home with USDA Guaranteed. We recently found out one of my husband's student loans came out deferrment and he did not know it. They reported late 3 times and has caused his score to drop 100 points! Our LO has asked him to pay for a rapid rescore with the defferment status letter. She says the CB should rescore and remove the lates. She tells me that UW will not look past this because his DTI is high. I have contacted ACS  they refuse to do anything about the reporting even though they have backdated the defferrment to cover it. Please help me understand, I an going nuts!

Established Contributor
Posts: 736
Registered: ‎08-25-2008
0

Re: FHA and student loan default solved!!

Just keep in mind that the quoted sections are the min for FHA - the lender may have, and most do, more stringent requirements and thus their UW guideline may be auto denial for recent student loan CO's regardless if rehabbed or not.  If it is their policy then you would have to search for another lender that has no such UW guidelines - a broker may be of more assistance here.

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