Jun 18, 2012
FHA rescinds "$1,000 dispute" rule
18 Jun 2012
Posted by Andrew Kantor
The Federal Housing Administration has done an about-face, rescinding a rule that would have prevented anyone with credit disputes totaling more than $1,000 from getting a loan.
When originally put in place (April 1), potential borrowers would either have to pay off their balances to get them below the $1,000 threshold, or provide documentation that a payment arrangement was in place.
Not surprisingly, there was pushback. A few days after the rule took effect, FHA said that borrowers whose disputed amounts were the result of a “life event” (medical bill, divorce, etc.) could use that to get around the rule.
Then, presumably because of the hue and cry, FHA said it would delay enforcement of the rule until it gathered more industry comments.
Apparently, those comments were along the lines of “NO.” On Friday, FHA rescinded the rule.