| Chase | Credit | Consumer Credit Counseling | Consumer Credit Counseling Services (CCCS) (06/15/10) - PRODUCT SPECIFICATIONS: • Permitted as long as borrower demonstrates 12 months of satisfactory repayments and CCCS administrator signs letter allowing borrower to seek financing. • Borrowers entering program for budgetary purposes (i.e., no previous credit problems) may have the 12-month time period waived. • Qualified on CCCS payment. |
| CitiMortgage | Credit | Consumer Credit Counseling | Debt management plans may be administered by a not-for-profit agency such as consumer credit counseling agency (CCCA) or a non-affiliated for-profit debt prorating service. Note:Homeownership Counseling, which is designed to help first time homebuyers prepare for the financial
responsibilities associated with home ownership, should not be confused with Consumer Credit Counseling.
This section addresses Consumer Credit Counseling Agencies (CCCA)/Debt Management Services (DMS)
only. Homeownership Counseling is addressed in the Community Lending chapter of this manual.
Note: Policy may vary based on the Documentation Process type selected. Refer to the applicable
Documentation Process Matrix for additional details.
The following scenarios ARE NOT considered added risk and should not be held against the borrower when
considering them for a mortgage loan.
* The borrower is/has participated in Homeownership Counseling in preparation for purchasing a home.
* The borrower is/has participated in consumer credit counseling or debt management program but
continues to manage their own finances.
* The borrower participated in consumer credit counseling or debt management program during which time
the counseling agency made payments to creditors on the borrower’s behalf. The following conditions must
be met:
* A minimum of 12 months must have passed since the borrower participated in the program.
* The borrower has demonstrated the ability to manage credit since then.
* The borrower has a satisfactory pay history on all accounts.
The following conditions ARE considered adverse risk factors and must be considered accordingly:
* The borrower is currently participating in credit counseling and making monthly payments to the Consumer
Credit Counseling Agency or other debt pro-rating service instead of paying creditors directly.
* The borrower has recently completed credit counseling or other debt service counseling program (less than
one year has passed) during which time the counseling agency made payments to creditors on the
borrower’s behalf. |
| MetLife Home Loans | Credit | Consumer Credit Counseling | AUS:
AUS does not identify when a borrower is participating in a consumer credit counseling service.
The presence of consumer credit counseling service does not alter the underwriting recommendation.
Whether the borrower has or has not completed his or her participation in the sessions before closing on the mortgage transaction is not relevant since it is the borrower's credit history that is of primary importance.
If the credit counseling accounts are on the credit report when submitted to the AUS and an approve or accept finding is received, then it is acceptable for the borrower(s) to still be in credit counseling.
Manual Underwriting:
If borrower has paid as agreed, the account has been paid off prior to closing, and borrower has re-established credit for at least 2 years, credit counseling is generally acceptable.
Borrower is not eligible if currently in credit counseling and has not re-established credit.
See individual loan product descriptions for exceptions.
If delinquent in past 12 months, not eligible.
If dismissed or withdrawn, the full original payment of all debts will be included in DTI.
Credit counseling is not eligible as a tradeline to meet minimum credit requirements.
Conforming Generic: If borrower meets all credit guidelines (i.e. credit score, credit history or non-traditional credit, etc.) for product, completion of credit counseling is not required |
| GMAC | Credit | Consumer Credit Counseling | Consumer Credit Counseling Services (CCCS) - Borrowers who have gone through credit counseling or who are still in credit counseling must meet all underwriting requirements, regardless of an automated underwriting recommendation. However, if the loan receives an Approve recommendation, no additional documentation is required, even if the Borrower is currently participating in consumer credit counseling. Refer to HUD Handbook 4155.1 Rev 5 Section 2-3 and Mortgagee Letter 2005-15 for complete details. |
| ING Mortgage | Credit | Consumer Credit Counseling | Borrowers participating in consumer credit counseling will be considered if they meet the
minimum credit score requirement and if the transaction puts them in an improved financial
situation (i.e., lower monthly payments or reduced DTI ratio) |
| M AND T Mortgage | Credit | Consumer Credit Counseling | Consumer Credit Counseling: 36 Months since satisfactory completion of the plan |
| PHH | Credit | Consumer Credit Counseling | Customers entering CCCS generally do so because they are unable to meet their financial obligations (debt repayment) as agreed. The Consumer Credit Counseling Service negotiates a reduced monthly payment with the customer's creditors, establishes a payment plan, and manages the distribution of payments to the creditors. This action may be used to avoid a "legal" bankruptcy; however, it is generally considered comparable to a Chapter 13 (reorganization of debt payment) for underwriting purposes.
Customers currently enrolled in CCCS are not eligible for Non-Conforming products.
Conventional Conforming Products
If the loan receives an AUS score that is permitted per product guidelines, the credit is considered approved even if the customer is currently enrolled in CCCS.
If the loan scores Caution or Refer / Ineligible, customers currently enrolled in CCCS are not eligible for conventional financing.
All Non-Conforming Loans or Manually Underwritten Conforming Loans
(This includes loans scoring Refer / Ineligible, Caution, or Caution A- with past CCCS experience.)
General Eligibility: Refer to product description for additional requirements that may apply.
Maximum LTV: Conforming is based on product selected, Non-Conforming is a maximum 90% LTV
Must be out of credit counseling (CCCS) for 1-year and evidence a minimum of 3 pieces of re-established credit with a satisfactory 12-month history.
Must document a satisfactory payment history with CCCS agency; including proof repayment plan was met.
No lates after completion of CCCS counseling.
Satisfactory credit explanation.
Single family, Condos (Fannie Mae eligible), and PUDs. |
| SunTrust | Credit | Consumer Credit Counseling | If “Approve/Eligible”
or no additional
underwriting is
required for
consumer credit
counseling.
• If “Refer,” non-AUS
guidelines apply.
NON-AUS LOANS
• The borrower must be out of
consumer credit counseling for at
least 12 months.
• The credit report must reflect a
current pay history over the last 12
months for each debt.
• If the borrower went into consumer
credit counseling prior to any credit
problems and the credit report
reflects this, there is no reason to
decline the loan or to make the
borrower wait until he/she is out of
the program for at least 12 months.
LP Loans:
• If “Accept/Eligible”, and the
Feedback Certificate identifies
an alert concerning consumer
credit counseling, no additional
underwriting is required.
• If “Accept/Eligible”, and the
Feedback Certificate does not
identify an alert concerning
consumer credit counseling,
non-AUS guidelines apply.
• If “Caution,” non-AUS
guidelines and documentation
apply. Additonal credit score requirements will be applied depending on LTV/CLTV. Please reference seller's guide for credit score outlines. |
| Wells Fargo | Credit | Consumer Credit Counseling | The presence of Consumer Credit Counseling is an exception to policy and will require prior review and approval by WFHE |
| Mortgage Services III | Credit | Consumer Credit Counseling | The presence of consumer credit counseling service does not alter the underwriting recommendation. Whether the borrower has or has not completed his or her participation in the sessions before closing on the mortgage transaction is not relevant since it is the borrower’s credit history that is of primary importance. *If borrower is currently in CCC, borrower must provide a letter from the service stating that they can incur the new housing expense.*If the loan is approved through the AUS, the CCC has been considered and no further action is required. |
| Sydion Financial | Credit | Consumer Credit Counseling | Some borrowers utilize consumer credit counseling or debt management services to assist in managing their debts. If
the borrower participated in a program, but continued to manage their own obligations (i.e. made their own payments),
then special consideration is not required. If the borrower participated in a program, including having the counseling
agency make payments on their behalf, then the following is required:
• Minimum 12 months must have passed since the borrower finished participating in the program
• The borrower’s credit must be paid as-agreed since participating in the program |