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FHA Question: Deferred student loans

It's actually been awhile since I've had an FHA borrower with student loans in deferment.

Borrower is still in school getting bacholers and has some loans in repayment and others in deferment.

Can someone shed some light on this for me... please
by LOANMAN January 11, 2012 12:27 PM


if deferment is greater than 12 months, you do not need to count them in ratios
by ol'canuckle head January 11, 2012 12:30 PM


is that going to be determined by the borrowers school schedule or a letter from the lender
by LOANMAN January 11, 2012 12:29 PM


Letter from the lender

If the student takes a break, the loan may go into repayment. The letter form the lender will spell out those terms
by Deep River January 11, 2012 12:43 PM


...ol'canuckle head, I've never heard of student deferments past a 12 month cycle. Ask yourself LM why would an investor need a borrowers school schedule?
by cspatmon January 11, 2012 12:45 PM


...ol'canuckle head, I've never heard of student deferments past a 12 month cycle. Ask yourself LM why would an investor need a borrowers school schedule?
by cspatmon January 11, 2012 12:45 PM

Clueless you are.

Just get a letter from the servicer that shows the deferment period. As long as it is at least 12 months you are good to exclude. I have seen student loans deferred for 3 years or more sometimes if they are still in school part time, etc...
by TheKyle January 11, 2012 12:50 PM


cspat

Thank you for the opportunity for self reflection upon my question.

Since you must know. I ASKED the borrower for something from the lender and they sent me their school schedule.

WHICH I thought was useless, but instead of just trashing it, I asked a question


Is that ok...


by LOANMAN January 11, 2012 12:56 PM


LM - A tip: If the student seems to have trouble getting the lender letter, send him/her to the school's Financial Aid office. Many times I needed one of these and the student sometimes spent hours (so they say) on the phone with the lender and couldn't produce what was needed.
by Deep River January 11, 2012 1:13 PM


Usually, deferrments last only 6 months beyond graduating from a program, unless there is a hardship in place. If the student is in a program that goes beyond 6 months (2nd year in a four year degree program, for example) MOST lenders will accept this. I would provide to lender school transcripts, current schedule and student loan info, which should show estimated date of when repayment is to commence.




by ol'canuckle head January 11, 2012 1:48 PM


The kyle, I didn't imply that it wasn't possible. It's a fact, I've never dealt with borrowers, in search of a real estate loan, that needed a deferment letter past 12 months. "unless there is a hardship in place" wouldn't be an option for credit approval. LM, you call it apples, I'll refer to it as oranges. Unlike, ol'canuckle I would only provide an estimated date of repayment. This question has came up on numerous occasions, and yet no one has came back to tell us about the results. I also disagree with the "MOST lenders will accept this", part. How about coming back and telling us how you manage around the student loan deferment issue. And closed the deal with your X approved lender. True experiences, will help all inquiring minds, including cspat. I love you also! Lol!
by cspatmon January 11, 2012 2:34 PM


apples.. what did I call apples..

Also, YOU can't provide an estimated date of repayment, only the lender owed the funds can, unless that's what you were trying to state..

are you referring to yourself in third person?


And I did get an answer back from our underwriters... 12 month deferment to get out of ratio, need letter from lenders. just as Ol Canukle mentioned..


thank you all for your help


by LOANMAN January 11, 2012 3:26 PM


4155.1 4.C 6.a Projected Obligations:

Debt payemnts such as a student loan or balloon note scheduled to begin or come due within 12 months of the mortgage closing date must be included by the lender as anticiapted monthly obligations during the underwriting analysis.

Debt payments do not have to be classified as projected obligations if the borrower provides written evidence that the debt will be defferred to a perido outside the 12 months timeframe.
*************************************************************




Please tell me, spats, what lender you refer to that will not accept this guideline on FHA loans.


by ol'canuckle head January 11, 2012 3:27 PM


crap half the purchase business i did last year I had kids with deferred student loans.

I got letters from Sallie Mae (or whomever) that stated repayment wasn't scheduled to begin until 2087 or whenever and I closed them all just fine...PITA to get the letters, but it can definately be done
by Donktard Borker January 11, 2012 3:31 PM


You can also get a credit supplement if you can't get the letters.

It gets a little expensive though if they have a bunch of loans. I use Kroll and I had one last month where the credit report ended up costing something crazy like $88.


by TheKyle January 11, 2012 3:46 PM


The til that the borrower receives when they apply for the student loans show the date that repayment starts. You should be able to use this. I did and it worked.
by McC January 11, 2012 8:44 PM


If you can get a letter from the lender stating that the payments will be deferred for 12 months we will not include them in the dti... Let's not forget that FHA lets non-occupying borrowers on the loan for qualifying reasons (must be a family member) so that may help you out as well.

Sincerely,

Gary Poteschil
Michigan Mutual Mortgage
(586) 610-7964 Cell
gpoteschil@michiganmutual.com

Fha down to a 620 score!!
by Nothing but the truth January 12, 2012 10:40 PM


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