HUD announced that collections in excess of $1000 need to be paid prior to financing

HUD announced that if the total outstanding balance of all collections on the borrower's credit report exceed $1000 the collections need to be resolved.  They can either enter into payment arrangements with the creditor with at least 3 months of payments made or pay them in full.  Medical collections are included.  This is a dramatic change from past guidelines and it will most assuredly exclude some new buyers from qualifying to purchase a home.  Click here to view the mortgagee letter for yourself.