Posted on: 04th Oct, 2010 11:29 am
My wife had a judgement in Florida for an unsecured credit card approx 7 years ago. We have lived in Texas for over 6 years. I have applied individually for an FHA loan for a house as a first time homebuyer. When the lender pulled my credit, they insisted on pulling my wife's credit, saying it was only to make sure she had no open revolving lines of credit that I would be responsible for.
Now, over 2 months later and when we are supposed to close, the lender is telling me that it is an FHA requirement that my wife's judgement be paid off before they can approve the loan. She is not on the loan, and her income was not included on the application. I have already be pre-approved.
First, I'd like to know if it is true that FHA will not insure the loan under these circumstances.
Second, would it be considered at the very least unethical and negligent for a lender to have this information at the very beginning of the loan process, make a promise at one point during the process (2 weeks ago) that the judgement is not an issue, then refuse to follow through?
Now, over 2 months later and when we are supposed to close, the lender is telling me that it is an FHA requirement that my wife's judgement be paid off before they can approve the loan. She is not on the loan, and her income was not included on the application. I have already be pre-approved.
First, I'd like to know if it is true that FHA will not insure the loan under these circumstances.
Second, would it be considered at the very least unethical and negligent for a lender to have this information at the very beginning of the loan process, make a promise at one point during the process (2 weeks ago) that the judgement is not an issue, then refuse to follow through?
Hi Guest,
As you're taking out a mortgage solely in your name, I don't think you should be asked to pay off your wife's credit card balance. I haven't heard of any such requirement. Moreover, if there is such a rule, then the lender should have informed you about it at the beginning of the loan origination process.
Thanks,
Jerry
As you're taking out a mortgage solely in your name, I don't think you should be asked to pay off your wife's credit card balance. I haven't heard of any such requirement. Moreover, if there is such a rule, then the lender should have informed you about it at the beginning of the loan origination process.
Thanks,
Jerry
Texas is a community state. Your wife's debt would be included in your DTI. Most lender's require any judgements to be satisfied before closing. Your LO should've known this from the beginning and informed you what they require you to do in this case.
