Some banks have already adopted that guideline.... This is from my LO at WF
Parameter
Credit Policy prior to April 30
Credit Policy on or after April 30
Disputed credit accounts
Disputed credit or collection accounts with an outstanding balance equal to or greater than $1,000 for any single account or the cumulative total if multiple accounts, must be resolved - either by a payment arrangement with a minimum of three months of verifiable payments - paid as agreed, or the balance must be paid in full at the time closing, or the balance must be paid prior to closing
Paying down the cumulative balances below $1,000 is not an acceptable resolution
Disputed Credit accounts
FHA is reverting to TOTAL Mortgage Scorecard guidance and not” old guidance” published in ML 2012-3 until further notice.
Loans with disputed trade lines require a 3F decisioner. Since TOTAL Scorecard does not evaluate disputed credit, the DE must review the disputed tradelines.
If credit risk class is Approve / Accept: Loans with disputed credit must be downgraded to a Refer and an individual CHUMS ID is required. Exception: The loan does not need to be downgraded and the AUS CHUMS ID (ZFHA) may be used if any of the following circumstances apply: The disputed account has a zero balance. or The disputed account is marked as “paid in full” or “resolved.” or The disputed account is both less than $500 and more than 24 months old.
If there are multiple disputed tradelines, each must meet the above requirement or the loan must be downgraded to a Refer.
If credit risk class is Refer: The DE must determine the loan meets creditworthiness standards and use his/her individual CHUMS ID. The decisioner analysis must be documented on the loan transmittal.
Collection accounts
Collection account guidance does not require payment or payoff resolution. Collection accounts do require a customer explanation
Collections
If credit risk class is Approve / Accept:
Reviewing for collections, on the credit report is not required. If collections, are revealed, but not on the credit report, the loan must be manually downgraded Refer Response or Manually Underwritten When collections, the borrower must provide a written explanation for all collections. FHA does not require that collection accounts be paid off as a condition of mortgage approval.
Court-ordered judgment exception
FHA continues to require court- ordered judgments to be paid off before a mortgage is eligible for an FHA insurance endorsement
An exception has been added: If a customer has an agreement with the creditor and is making regular and timely payments, and can provide documentation reflecting a minimum of three months of payments and the monthly payment is included in the customer’s debt-to-income ratios, FHA will treat the judgment as an exception
EQ FICO score from here... EQ 716
USAA monitoring Experian Plus scores : EX 773 EQ 773 TU 785
