Spring EQ guidelines for major adverse credit such as collections, judgements, charge-off's, etc
• Major adverse credit is identified as collection accounts, charge-off accounts, judgments, liens, delinquent property taxes, repossessions, garnishments, and non-mortgage accounts currently 90 calendar days or more delinquent• Collection accounts and/or charge-offs on non-mortgage accounts do not have to be paid off at or prior to closing if the balance of an individual account is less than $250 or the total balance of all accounts is $1,000 or less. Medical accounts do not need to be paid off at or prior to closing if less than $5,000. These accounts may be left open provided they do not affect title
• Property tax liens (for the Mortgaged Property and other properties), regardless of seasoning, are required to be paid in full whether or not they currently affect title
• When the 1040 tax returns or tax transcripts show a tax liability owed to the IRS where the total amount due is greater than 1 months PITIA payment (first and second mortgages), documentation showing the tax liability is paid in full is required. Past due State and IRS taxes are defined as unpaid taxes due on the current or previous year’s tax deadline which is generally on or around April 15th. No payment plans or subordination are allowed. Documentation in the form of an IRS payoff or an account record from the IRS (issued after the application date) indicating the past due amount and any penalties and/or fees, is acceptable to verify the balance to be paid at closing.