Mortgage Loan Reject

In a move geared toward improving and streamlining credit access to qualified borrowers, the FHA is getting rid of the Mortgage Credit Reject screen. Up until now, the FHA required lenders to flag information about denied applications due to a provision in its Single Family Housing Policy Handbook. That information was flagged for a six-month period, to be reviewed by one of the agency’s Homeownership Centers when applicants tried for an FHA-insured loan from other lenders. Borrowers may have been denied a loan again because of this initial rejection, even if they qualified otherwise. FHA officials have concluded that the process “does not improve risk management and is often why other lenders will reject an applicant even when that applicant…