topic Re: Do old chargeoffs/collections and lates matter for FHA? in Mortgage Loans

Do old chargeoffs/collections and lates matter for FHA?

igids1 — Thu, 13 Sep 2012 16:45:59 GMT

Long story short....Credit from 2008/2009 is pretty bad. 3 Chargeoffs, and some student loan defaults. All taken care of now. Lots of 30/60/90/120 from back then. Will that be overlooked as long as there is 1 year of clean history and scores over 620?

Also, I am looking for clarification. Say something went into collections in 2009, and I paid it today. Does that start the 1 year of clean history? So If I pay an old collection today, do I have to wait another year to be clean for one year?

Re: Do old chargeoffs/collections and lates matter for FHA?

How2increase — Thu, 13 Sep 2012 23:44:00 GMT

As long as those things are taken care of and you have a strong payment history after that, you should be fine. if anything a good LOE will probably work well.

As far as the collection, I've always been told to NOT touch them, as it will update as a new collection. Did you in fact pay it? Or just thinking about it?

Re: Do old chargeoffs/collections and lates matter for FHA?

Shogun — Fri, 14 Sep 2012 04:41:07 GMT

How2increase wrote:
As long as those things are taken care of and you have a strong payment history after that, you should be fine. if anything a good LOE will probably work well.

As far as the collection, I've always been told to NOT touch them, as it will update as a new collection. Did you in fact pay it? Or just thinking about it?

If they are paid and your scores are OK don't bother with them until after your mortgage loan processs is done and you have the house. If you put those accounts into dispute it can be a pain to get those off for the mortgage.

Re: Do old chargeoffs/collections and lates matter for FHA?

igids1 — Fri, 14 Sep 2012 14:04:24 GMT

I have two open collections. They are from accounts that went delinquent back in 2008. Im not being contacted by the CA.s for them. I paid off one collection in Feb of this year. The collection I paid in Feb was also from a delinquent account in 2008. It only shows as a collection 2/2012 Nothing before, nothing after. In other words I do not have 48 months of CO. Just 1 month with a CO, Feb 2012.

Re: Do old chargeoffs/collections and lates matter for FHA?

imandy — Fri, 14 Sep 2012 18:51:46 GMT

You're going to have a hard time with two open collections. Anything non-medican more than $1k will need to be paid regardless of how old it is (if it's on your report)

Re: Do old chargeoffs/collections and lates matter for FHA?

igids1 — Sat, 15 Sep 2012 14:21:49 GMT

I thought the 1k was a PROPOSED change, that was redacted?

Re: Do old chargeoffs/collections and lates matter for FHA?

imandy — Sat, 15 Sep 2012 22:59:47 GMT

I'm pretty sure the FHA rule is still "Officially" Medical collections less than 1k... but FHA lenders can have rules that are more strict (and most do) so 90% of them probably won't allow any collections whatsoever.