VARbuzz: FHA delays ‘collections rule’ till July
The Federal Housing Administration is holding off on its new rule that would prevent anyone with more than $1,000 in collections to qualify for federal backing.
It seems FHA got an earful from, well, everyone. In this economy, saying that anyone with more than $1,000 in dispute with a creditor disqualifies you … well, that eliminates a lot of people. First-time buyers were going to be hardest hit.
When the hue and cry first got loud enough, the agency agreed that borrowers could explain away some of that debt in the case of major life events — job loss, divorce, medical bills, etc. But that wasn’t enough, so it’s postponed the rule until after a public comment period gives everyone a chance to weigh in.