Financing in Oakland>Question Details

Honeytoast4u, Home Buyer in Oakland, CA

DOES FHA LOANS CARE ABOUT MEDICAL BILLS ON YOUR CREDIT I WAS TOLD THAT MEDICAL BILLS DO NOT IMPACT YOUR APPROVAL?

Asked by Honeytoast4u, Oakland, CA Tue Jun 21, 2011

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If they are the only items on your credit then an underwriter should be OK with them, as medical bills are considered pretty minor. However if there has been a repeated pattern of collections, late payments, etc. and then the brand new medical collection(s) it would need to have a very good reason (not a "I forgot to pay it" reason) in order for an underwriter not to think you are falling back into old ways. If you are willing to pay it, then you should be able to get the medical collection removed from your credit report though.
1 vote Thank Flag Link Tue Jun 21, 2011
Hi...

FHa does NOT require medical paid during a purchase transaction. They will take into account your FICO but not medical collections. Give me a call anytime to discuss!

Brian
Web Reference: http://www.loansquawk.com
1 vote Thank Flag Link Tue Jun 21, 2011
check with a loan officier at your favorite bank
Web Reference: http://sellandfindhomes.com
0 votes Thank Flag Link Tue Jun 21, 2011
Also, even if you're credit score is below 620 FICO with the current medical collections there are still lenders that are willing to lend going FHA depending on the merits of your credit profile. If you need a second opinion on reviewing your credit report feel free to contact me.
Web Reference: http://www.bma-loans.com
0 votes Thank Flag Link Tue Jun 21, 2011
Honeytoast4u,

Here's what the actual FHA guidelines say for collections:

Court-ordered judgments must be paid off before the mortgage loan is eligible for FHA insurance endorsement. (An exception may be made if the borrower has agreed with the creditor to make regular and timely payments on the judgment and documentation is provided that the payments have been made in accordance with the agreement.) FHA does not require that collection accounts be paid off as a condition of mortgage approval. Collections and judgments indicate a borrower's regard for credit obligations and must be considered in the analysis of creditworthiness with the lender documenting its reasons for approving a mortgage where the borrower has collection accounts or judgments. The borrower must explain in writing all collections and judgments.

If you have questions about this, just let me know. I'm just across the bridge.

Rob Spinosa
rspinosa@rpm-mtg.com
0 votes Thank Flag Link Tue Jun 21, 2011
FHA lenders will typically want this collection account to be paid in full at the close of escrow. Now, if it is a collection account that belongs to a non-lending spouse, the lender shouldn't consider the collection account towards the qualifying debt and make the payment required at the close of escrow.

I hope this helps.

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
mabram@firstcapitalmtg.com
0 votes Thank Flag Link Tue Jun 21, 2011
yes it does its a collections on the account that i did not pay
0 votes Thank Flag Link Tue Jun 21, 2011
Hello Honeytoast4U,

Can you give a little more information about the medical bills? Did they appear on your credit report as collection accounts?

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
mabram@firstcapitalmtg.com
0 votes Thank Flag Link Tue Jun 21, 2011
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