real estate finance - full book (500 pgs)

Maximum allowable ratios of housing expense to income

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Unformatted text preview: 3-35 REAL ESTATE FINANCE to Section 609.” Since the lenders are not classified as credit reporting agencies and since they do not normally have trained credit reviewing personnel on their staff, they will refer all questions and explanations to the credit reporting agency that provided the report. Both FNMA and FHLMC now urge lenders to use credit scores in evaluating applicants when the loan is expected to be sold on the secondary money market. FNMA warns lenders that borrowers rated below 620 should not get loans with very low down payments. FHLMC is now rejecting 50% more audited loans below the new standards. The new underwriting software systems are automatically producing FICO scores along with LTV and debt–to–equity ratios. In addition, the credit rating score is nondiscriminatory because it does not consider gender or ethnicity and uses only the FICO score as a rating stick. One question that may be asked by a buyer about his or her credit is, How long does a bad entry stay on my credit report? According to the Fair Credit Reporting Act, Section 605, entitled Obsolete Information, certain information may not be included on a credit report for a loan with a principal balance of $50,000 or less. According to this section, the time limits are as follows: 1. 2. Cases under Title 11 of the U.S. Code or Bankruptcy Act that occur more than 10 years prior to the date of the credit report may not be included. Suits and judgments may not be included in the report where the date of entry is more than 7 years or sooner if the governing statutes of limitations has expired. Paid tax liens where the date of payment is 7 years or more prior to the date of the credit report may not be included. Accounts placed for collection or charged to profit and loss more than 7 years prior to the date of the credit report may not be included. 3. 4. 13-36 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 13: QUALIFYING THE BORROWER 5. Any record of arrest, indictme...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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