FHA Rescinds Disputed Credit Policy
Some lenders say the change will curtail abuses by consumers who try to hide debts. Others fear FHA's new guidelines will constrain credit just when the housing market needs it.April 4
The Federal Housing Administration has rescinded guidelines that would have made it harder for consumers to qualify for a mortgage if they have a collection action or disputed credit account of at least $1,000.
The FHA, which is part of the Department of Housing and Urban Development, on Friday rescinded the credit dispute policy that would have gone into effect July 1. The policy would have required that consumers either pay off their debts or make a minimum of three months' payments before qualifying for an FHA loan.
Lemar Wooley, an FHA spokesman, said the agency expects to publish "new clearer language," on its credit dispute policy "very soon," and is asking stakeholders for feedback.