topic Re: Credit pull before closing? in Mortgage Loans

Credit pull before closing?

laniepr787 — Fri, 30 Mar 2012 22:40:38 GMT

I applied for a USDA Guaranteed loan and I'm scheduled to close on my home on 5/2/12. The credit report they have was pulled on 3/16. I have a collection agency that popped out of nowhere trying to collect on an old debt from 2006 although they still haven't reported it yet. My question is, does anyone know if it's common to have your credit pulled before closing for a USDA loan. I'm starting to freak out about this!!

Re: Credit pull before closing?

CreditBob — Sat, 31 Mar 2012 00:46:17 GMT

It is common that on any mortgage loan that a second credit report be pulled right before you close on the loan. What is the collection debt for & how much is it? The worst thing that you can do is not to reply to the collection account. So immediately contact the company & see what is going on. There is also a statute of limitations on how long a collection company can collect on In some states it is 4 years. You would also want to check what the time period for your state is.

Re: Credit pull before closing?

laniepr787 — Sat, 31 Mar 2012 23:13:52 GMT

Hi Bob, thank you for responding. The collection debt is for a Sprint cell phone from 2006. It's actully my husband's account that he let his brother take over because he wanted to switch companies but was still under contract. His brother never paid like he agreed to do and now this CA says we owe $496.00 but will take a settlement of $173.73. I sent them a letter agreeing to pay the settlement amount if they agreed not to list the account and I'm crossing my fingers it'll work. We are closing on May 2 with USDA Guaranteed. I told my broker about the collection call and he said the report was good until closing and not to worry about it but I'm still freaking out!

Re: Credit pull before closing?

tubesock — Sat, 31 Mar 2012 23:20:57 GMT

I hope it works out for you ...fingers crossed!

Re: Credit pull before closing?

boomhower — Mon, 02 Apr 2012 12:50:39 GMT

IT varies from lender to lender. Some do and some don't, mine didn't. GL on the PFD.

Re: Credit pull before closing?

pizzadude — Mon, 02 Apr 2012 12:54:29 GMT

CreditBob wrote:
It is common that on any mortgage loan that a second credit report be pulled right before you close on the loan. What is the collection debt for & how much is it? The worst thing that you can do is not to reply to the collection account. So immediately contact the company & see what is going on. There is also a statute of limitations on how long a collection company can collect on In some states it is 4 years. You would also want to check what the time period for your state is.

The SOL for each state only refers to the period of time in which a creditor/CA has to file a lawsuit against you for unpaid debt ~ it does not prevent other collection activities from occuring after the SOL has expired. CAs can try to collect on debts forever, in theory....

Re: Credit pull before closing?

RW771 — Mon, 02 Apr 2012 17:28:17 GMT

laniepr787 wrote:
I applied for a USDA Guaranteed loan and I'm scheduled to close on my home on 5/2/12. The credit report they have was pulled on 3/16. I have a collection agency that popped out of nowhere trying to collect on an old debt from 2006 although they still haven't reported it yet. My question is, does anyone know if it's common to have your credit pulled before closing for a USDA loan. I'm starting to freak out about this!!

Yep most lenders will pull your credit one last time right before closing to make sure nothing has changed and that you're not applying for credit everywhere under the sun! I didn't learn about opt-ing out until the last minute right before I applied for my home loan, but for those that are in the process of buying a home/looking to apply, I would definitely do this to avoid snake like CA's from coming out of the woodworks. It's sad how that can jeopardize someone buying a home!

I would be upfront with my LO and let him know the situation and how you are handling it. Best thing would be to try and get the CA to accept a PFD, but if they won't remove it, at least showing it to be paid would be most in your favor. GL to you!

Re: Credit pull before closing?

laniepr787 — Sun, 29 Apr 2012 15:31:25 GMT

Just wanted to update that this account has been deleted from my husband's credit report.

We first sent an agreement to pay the settlement amount with the condition that the account would not be listed on my husband's credit report and the CA never respoded. They reported the account without responding to our letter.

We then sent a debt validation letter which seems to have worked because as of today, the account has been deleted from all 3 credit bureaus!!

We close on our home on May 2 which is excellent news for us!! Thank you all for your advice. This forum has been extremely helpful!!!

Re: Credit pull before closing?

boomhower — Mon, 30 Apr 2012 11:08:09 GMT

Glad to hear it worked out. Sme lenders pull a second and some don't. As quickly as yours is closing I'm not surprise they aren't pulling a second, mine was about the same timeframe and they didn't pull a second either.