FHA gives borrowers with collection accounts a chance as of April 1st
Borrowers with a disputed collection account have a new opportunity to give an explanation and get an FHA backed mortgage. If a borrower has a disputed amount of more than $1,000 he needs to show that he either paid it off or entered into a payment plan in order to qualify for a new government FHA backed mortgage.
However, the new rule states that if the dispute is due to a life event, like a divorce, medical bill, death or unemplyment (pretty much every reason…), the borrower can send an explanation in writing and may get an excemption. That is a good indication that the restrictions are being eased.
The restoration of a normal lending scenario is important to the full recovery of the real estate market. We are seeing lots of cash transactions, something that is the norm in Latin American countries but a rare phenomenon in the US. Tons of buildings are “untouched” by lenders due to a high ratio of delinquencies and on top of that most foreclosures and properties that are attractively priced are only accepting cash offers, even if they are regular sales.
Investors from all over the world are hunting for good deals in Miami, and that’s great. But we also want to bring back the young couple ready to start a family, the guy next door, and for that we need credit. That is probably the next step to finally bounce back from a painful crisis.
If you want to buy or sell a property and want a Real Estate Tiger working with you contact us, you’ll be happy you did.
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