Mortgage Solutions Financial-Garry Marshall

09/03/2026

With an FHA loan, extenuating circumstances can sometimes help explain derogatory credit, particularly when the borrower’s problems were caused by something beyond their control and the borrower has since re-established good credit.

According to FHA Handbook 4000.1, the key is documentation and showing that the circumstances were beyond the borrower’s control.

Examples of potential extenuating circumstances

Some common situations that may be considered include:

Serious illness or major medical event
Death of a wage earner in the household
Significant loss of income
Involuntary job loss or layoff
Major reduction in hours or pay
Natural disaster that caused financial hardship
Military deployment or service-related circumstances that created a financial disruption
Major uninsured or unexpected financial expense
Bankruptcy caused by circumstances outside the borrower's control

The important part is that simply having one of these events isn't automatically enough. The lender needs to establish a clear connection between the event and the derogatory credit, and determine that the situation isn't likely to recur.

Here's a big one to remember

Divorce by itself is generally NOT considered an extenuating circumstance under FHA.

However, FHA does provide a specific exception in certain foreclosure situations—for example, if the mortgage was current when the borrower divorced, the ex-spouse received the property, and the mortgage subsequently went into foreclosure.

Also, being unable to sell a previous home because of a job transfer or relocation generally does not qualify as an extenuating circumstance for the FHA foreclosure exception.

What I would want to see as a loan officer

If you're trying to make a case for a borrower, I'd build the file around:

1. What happened?
2. When did it happen?
3. How did it affect their income/finances?
4. Why did that cause the late payments/default?
5. What has changed since then?
6. Why is it unlikely to happen again?
7. What documentation proves the story?

For example, if someone lost their job and fell behind on credit cards:

Layoff letter → unemployment records → bank statements showing income loss → explanation of the late payments → new employment → 12+ months of re-established payment history.

That's much stronger than simply writing, "I lost my job and couldn't pay my bills."

One important distinction: FHA's treatment can differ depending on whether you're dealing with late payments, bankruptcy, foreclosure, short sale, or other derogatory credit, so the exact circumstance matters.

09/01/2026

3 VA Benefits Veterans Don’t Talk About Enough

Everybody talks about 0% down and no monthly PMI with a VA loan.

And yes, those are HUGE benefits.

But there are some other benefits that could matter years after you buy the house.

Here are 3 that I think Veterans need to know about before somebody talks you OUT of using your VA loan:

🏠 1️⃣ Your VA Loan Can Be ASSUMABLE

Think about this…

You buy a home today with a VA loan at a great rate.

Years from now, rates go up.

Your VA loan could become a selling advantage because, if the loan and buyer meet VA requirements, the buyer may be able to assume your existing VA loan and its interest rate.

That could make your house stand out when you're ready to sell.

📉 2️⃣ The VA IRRRL Can Make Refinancing Easier

When rates come down, the VA IRRRL may allow an eligible Veteran with an existing VA loan to refinance without going through the exact same process as a brand-new purchase loan.

Depending on the situation, there may be:

✅ No VA-required appraisal
✅ Streamlined income documentation
✅ Less paperwork
✅ No need to qualify exactly like you did when you originally bought

And here's the big thing…

Your home doesn't necessarily have to increase in value for you to benefit from an IRRRL.

❤️ 3️⃣ VA Can Give You Options When LIFE CHANGES

Marriage. Divorce. Death of a spouse. Changes in your financial situation.

Life doesn't always look the same 5 or 10 years after you buy your house.

VA refinance guidelines can provide options in certain situations when borrowers need to be added or removed from the loan.

You may not think about that when you're sitting at the closing table…

But years later, it could be VERY important.

🇺🇸 THIS is why I don't like seeing Veterans automatically talked out of their VA benefit.

Don't just ask:

“Which loan is cheapest today?”

Ask:

“Which loan gives me the best options today AND tomorrow?”

Your VA loan isn't just about getting into the house.

It's a benefit that can continue to work for you after you buy.

Don't FHA my VA.
Don't Conventional my VA.

Know your benefit before you give it up.

And who you choose to help you with that VA loan matters.

The More You Know, The More We Serve!

08/28/2026

VA TIP: How much money do you REALLY need to buy a house?

One of the biggest questions I get from Veterans is:

“How much money do I need saved up to buy a house with my VA loan?”

Here’s the good news…

👉 You may not need a down payment at all.

With a VA loan, you can potentially buy a home with 0% down, as long as the purchase price doesn’t exceed the VA appraised value.

But 0% down does not always mean $0 out of pocket.

You may still have things like:
✔️ Closing costs
✔️ Prepaid taxes and insurance
✔️ Home inspection
✔️ VA appraisal
✔️ Earnest money
✔️ VA Funding Fee, if you’re not exempt

The good news is that the seller may be able to pay some or all of your allowable closing costs, which can greatly reduce the amount of cash you need to bring to closing.

And if you’re exempt from the VA Funding Fee, that can save you even more money.

So the answer isn’t “You need 3%” or “You need 5%.”

Your actual cash needed depends on the house, your loan, closing costs, seller contributions, and your specific situation.

🇺🇸 Veterans, don't assume you need thousands and thousands of dollars saved before you can buy.

Let's look at your situation and see what you actually need.

If you're thinking about buying, send me a message. Let's run the numbers.

08/27/2026

08/27/2026

VA TIP OF THE DAY 🇺🇸

Did you know you may NOT have to pay the VA Funding Fee?

A lot of Veterans don’t realize there are exemptions.

You may be exempt if you:

✅ Receive VA compensation for a service-connected disability
✅ Are eligible for VA disability compensation but receive retirement or active-duty pay instead
✅ Are a qualifying surviving spouse receiving DIC(a tax-free monetary benefit paid by the Department of Veterans Affairs to eligible survivors of military service members who died in the line of duty or veterans whose death resulted from a service-related injury or illness).
✅ Are an active-duty Purple Heart recipient

💡 That could mean thousands of dollars you DON’T have to pay or finance into your loan.

If you're a Veteran thinking about buying a home, let me check your situation before you assume you have to pay the funding fee.

🇺🇸 Thank you for your service!
📲 Give me a call—I’d be glad to help you understand your VA benefits and your home loan options.

08/26/2026

🇺🇸 **VA TIP OF THE DAY #11 — BIG VA LOAN GUIDELINE CHANGE! 🇺🇸

**This is a HUGE win for Veterans with old collection accounts.**
As of the latest **VA Pamphlet 26-7, Chapter 4 update**, VA has changed how **non-medical collections** are calculated for qualifying.
Previously, lenders could be required to use **5% of the outstanding collection balance as a MONTHLY payment.**
🔥 **THE NEW CALCULATION:**
**5% of the outstanding non-medical collection balance ÷ 12 months**
That is a MASSIVE difference.
💰 **Example: $10,000 in collections**
**OLD calculation:**
$10,000 × 5% = **$500/month**
**NEW calculation:**
$10,000 × 5% ÷ 12 = **about $42/month**
That's **$458 LESS per month** being considered in the qualification!
For a Veteran who was previously struggling with DTI or residual income, this change could absolutely help them qualify.
And remember:
✅ **Medical collections do NOT require a monthly payment to be counted.**
⚠️ **BUT HERE'S THE PART NOBODY IS TALKING ABOUT...**
A lower collection payment absolutely helps with the numbers, **but it doesn't automatically make the credit history acceptable.**
If a Veteran has **major collection accounts within the most recent 12 months**, those accounts may still create a significant challenge when trying to obtain a **VA manual underwriting approval.**
**The math may work now. The credit history still has to make sense.**
On the other hand, if you're a Veteran who was previously told **NO** because of collections — especially if those major collections are now **more than 12 months old** — it may be time to have your VA loan reviewed again by a lender who actually understands **VA manual underwriting.**
🇺🇸 **Veterans:** If you've been told you can't qualify because of collections, don't assume that's the end of the story. Find a **GOOD VA lender** who understands manual underwriting — or check back in with me.
**VA loans aren't always about checking a box. Sometimes you need someone who actually knows how to work the guideline.**
**Who a Veteran works with matters. 🇺🇸**
**The More we Know, The More Veterans We Serve!**

08/11/2026

VA TIP OF THE DAY

Veteran, did you know a gap in your employment does NOT automatically disqualify you from getting a VA loan?

I hear this concern all the time.

You may have been out of work for a period of time, changed jobs, or transitioned from the military into a civilian career.

That doesn't automatically mean you can't qualify.

With a VA loan, we’re looking at your overall employment history and your ability to show stable, reliable income.

Generally, we want to see about 2 years of employment history and at least 1 year in the same line of work.

And here's the important part…

👉 You don't have to work for the same company for that entire year.

Your military experience can also help connect the dots.

Your MOS, military training, certifications, education, and previous experience can all help demonstrate that you're continuing in the same career field.

So if you've had a job gap, don't assume you can't get a VA loan.

Let's look at your entire story and see what we can do.

🇺🇸 You've earned the benefit. Make sure you're working with someone who knows how to use it.

Who a Veteran works with matters!

The More You Know, The More We Serve!