· Regardless if the loan is being manually underwritten or has an AUS Approval, owing FHA collections will have a greater impact on someone’s ability to qualify – FHA is now requiring a “capacity analysis” of collection accounts with an aggregate balance equal to or greater than $2,000 (this includes non-borrowing spouse’s in community property states.
note, he/she is not considered a borrower for FHA purposes, and therefore need not sign the loan application or be considered in credit underwriting. Reference: For more information on non-borrowing spouses, see HUD 4155.1 4.5 . Continued on next page
FHA Reverse Mortgage Rules: Non-Borrowing Spouses con’t. In the past, following the death of the borrowing spouse, reverse mortgages immediately became due and payable. Thus the surviving non-borrowing spouse could not remain in the home and was subject to foreclosure, piling grief upon grief.
The Federal Housing Administration (FHA) today issued new guidance for under the Home Equity Conversion Mortgage (HECM) program, allowing lenders the option to delay foreclosure of non-borrowing spouses, according to a new Mortgagee Letter. The guidance presents an option, not a requirement for lenders, meaning that existing non-borrowing spouses may have new protections under certain.
Non-Borrowing or Not? A spouse may not be a borrower on the loan for several reasons. For example, a spouse who is younger than 62 will not qualify as a borrower, but may still be included on the loan as a non-borrowing spouse. This may be a wise choice if both spouses want to get a reverse mortgage as soon as possible – even if the younger.
Your home must also meet other fha property guidelines and standards. The minimum credit score to qualify for a HELO is 640, and non-borrowing spouses can’t be listed on the HELO (in other words,
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· The problem is that HUD did not make the mortgages and doesn’t own most of them. Under the terms of the mortgages, lenders that own the mortgages, including Fannie Mae, Ginnie Mae and others, are entitled to foreclose after the borrower spouse dies, says Jean Constantine-Davis, senior attorney with AARP Foundation. “So,
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Effective for all new hecm loan fha case numbers issued on or after August 4, 2014, the HUD letter states that non-borrowing spouses may remain in their homes for a certain "deferral period" even after the death of their spouses. However, the non-borrowing spouse must: – Establish legal ownership or right to remain in the home