August 31, 2015
We frequently handle reader questions in the comments section regarding FHA loan policies that affect borrowers going through a legal separation or divorce. In some cases, the questions have a lot to do with why a lender may require the spouse’s credit information or other details even though the couple is legally separated.
One recent question addressed just that-the FHA loan applicant was being asked by the lender about spouse credit issues even though there was a legal judgment or ruling stating the couple was legally separated and not involved in joint credit or shared debt according to the terms of the legal agreement.
Why would the lender, the reader wondered, still require the spouse’s financial or credit information?
Unfortunately, there is no one specific answer to give. Some states have community property laws which may require a certain procedure so long as the couple is still legally married. In other cases there may be lender standards at work that, depending on circumstances, would require certain information as long as the couple’s official status is anything other than officially, legally divorced.
And sometimes, there may be an erroneous read of either FHA loan rules or even lender standards that might be clouding the issue–human error is sometimes a factor.
But the bottom line is that when in doubt, legal counsel may be required in such cases–any situation that involves state law is outside the jurisdiction of the FHA. Any situation that involves a basic mis-application of FHA loan rules is a different story, but only the FHA itself can make the determination that its rules have not been applied properly.
Speaking to the lender and to legal counsel is the best way to begin addressing these issues. If you have doubts that FHA loan rules have been followed properly, contact the FHA directly at their toll-free number: 1-800 CALL FHA.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It is easy to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today: http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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