A bit confused on a 'DENIAL' for qualifying for FHA (or any mortgage)

[StartingOver10]

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@Ron6262 wrote:

     You need to find a broker that deals with a lender that has a 620 program.  I used Michigan Mutual, they have a 620 to 639 program, it requires you to have 2 months reserves in bank and no gift allowed for downpayment.  Other than that it was pretty simple.

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^^^^this is right.

Go to a mortgage banker that has their own underwriting and funds their own loans. They can broker too if they don't have the right program for you.

The lender you went to has tougher criteria than many (I'm familiar with them). Sounds like the LO doesn't quite know her job if she said the average score was used - she could be new to the field.

Your collections are causing your scores to be low. Try a PFD on the collections and you will see your score increase tremendously. The problem you are going to have now is the fact you actually app'ed for a mortgage and those inquiries are showing as mortgage inquiries. It makes negotiating with the CA's difficult because they know they have to get paid prior to you getting a loan.

[cappucino24]

Starting Over10,

Yeah that's what I was afraid of...I mean the total of the 2 collections is around $2000. I purposely wasn't going to pay them because they are indeed inaccurate. I have fought with the credit reporting agencies to delete and all that did was piss the CA off and they began reporting again..last report was 4/12...I've been laying low..I really just wanted to know where I stood credit wise to pace myself so I could qualify by January..but now seeing how close I am, hell I'm ready now!! lol

What if I just wait for my scores to increase..would that make a difference? Will the collections still have to come off or can I explain when it goes to underwriting? They are both over 24 months old...

[MetalguitarJames]

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@Anonymous wrote:

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@cappucino24 wrote:

Hi my25 reasons..where are you getting my scores from?..My scores are 635 Exp, 661 Trans, and 635 EQ...am I reading the scores wrong? Look at the credit scores in my original post... The TOTAL balance on from both of my credit cards are $5. I think it's the car loan that's has the high balance since I just refinanced.

Being a first time homebuyer is the most frustrating, confusing, and I'm sure rewarding (eventually) process...I just want to find an honest and reliable lender to help walk me through the qualifying process...it's like they just pulled my credit and kept going..

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Mid score is the middle of the 3 scores NOT the average of the 3. So 661 635 635 is a mid score of 635. So say your scores were 720 680 650, 650 would be the the middle not the highest and not the lowest.

TBC

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Correction: You mean that if he had a 720 680 650, 680 would be his middle score correct?

[ceejx]

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@Anonymous wrote:

Mid score is the middle of the 3 scores NOT the average of the 3. So 661 635 635 is a mid score of 635. So say your scores were 720 680 650, 650 would be the the middle not the highest and not the lowest.

TBC

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nevermind, somebody beat me to it 

[cappucino24]

lol!..you all are too funny..and I'm a she not a he!

[Anonymous]

Very good you win an ecookie (''')

TBC

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@MetalguitarJames wrote:

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@Anonymous wrote:

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@cappucino24 wrote:

Hi my25 reasons..where are you getting my scores from?..My scores are 635 Exp, 661 Trans, and 635 EQ...am I reading the scores wrong? Look at the credit scores in my original post... The TOTAL balance on from both of my credit cards are $5. I think it's the car loan that's has the high balance since I just refinanced.

Being a first time homebuyer is the most frustrating, confusing, and I'm sure rewarding (eventually) process...I just want to find an honest and reliable lender to help walk me through the qualifying process...it's like they just pulled my credit and kept going..

---

Mid score is the middle of the 3 scores NOT the average of the 3. So 661 635 635 is a mid score of 635. So say your scores were 720 680 650, 650 would be the the middle not the highest and not the lowest.

TBC

---

Correction: You mean that if he had a 720 680 650, 680 would be his middle score correct?

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[StartingOver10]

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@cappucino24 wrote:

Starting Over10,

Yeah that's what I was afraid of...I mean the total of the 2 collections is around $2000. I purposely wasn't going to pay them because they are indeed inaccurate. I have fought with the credit reporting agencies to delete and all that did was piss the CA off and they began reporting again..last report was 4/12...I've been laying low..I really just wanted to know where I stood credit wise to pace myself so I could qualify by January..but now seeing how close I am, hell I'm ready now!! lol

What if I just wait for my scores to increase..would that make a difference? Will the collections still have to come off or can I explain when it goes to underwriting? They are both over 24 months old...

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If it were me and I were fighting erroneous collections, I would really fight them to get them off the report. If they are being incorrectly reported and you have notified them of that fact, then get aggressive and take the CA to court.  But you have to be able to back up your play. Go to the rebuilding board here or search some of the other boards that are a little more aggressive and get rid of the collections. (I don't think I can mention those more aggressive debtor type boards on here but a simple google search will find them.).

There are several good things that will come as a result of fighting the CA's:  1) empowerment for you; and 2) an accurate report; and 3) you may end up with $1k or so if you are able to show the CA violated the FDCPA and 4) you end up on a list of debtors that fights back so CA's are then more reluctant to go after you unless they have all the documentation. 

[Booner72]

If I were you, I would continue to rebuild and get my midscore above 640.  that will open up more loans through a broker and it will be MUCH MUCH easier to get through undewriting and closing.  You are much more scrutinized, and sometimes pay more in interest, for a sub 640.  Sometimes, not all.  Just depends on how much you want the house and how fast.  But since you don't even have a specific house (that I read at least), why not wait just a little bit?  Five points is EASY when you rebuilding (lowering utilization and removal of negatives).

Good Luck!

[imandy]

I just want to chime in here and say that from reading your original post I'm not sure you've even been declined. Did you receive a letter stating that you've been declined and THEN a copy of your FICO scores that lists all the postive and negatives? Because everyone that has their credit pulled receives something similar to what you've just posted whether you're approved or not approved. They are required by law to provide this to you. I just never saw anywhere in your orignal post that you received a letter saying you were DENIED.

It sounds like this is a communications issue...I might make some more phone calls to the lender but demand they give you another officer/originator to work with because this is not a good sign.

[cappucino24]

Hey Booner!

No I don't have a specific house yet, just been pretending I'm house hunting. As I mentioned, my lease is up in March of 2013 so I'll start looking around Dec./Jan...and I plan to continue rebuilding to pad my score as much as I can...in case the inquiries come to haunt me. Today I researched the FHA underwriting guidelines for the standard and 620-639 programs and yeah it would be wise for me to pump my breaks and get back on the rebuilding bus.