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Frequent Contributor
NewbieReed
Posts: 416
Registered: ‎12-05-2012

All Charge-offs must be paid prior to closing

So I am talking with three diffeent lenders as I am shopping for my loan. We've been emailing. I have a one-on-one appt with 2 of them on Saturday.  The one who doesnt hold office hours on the weekends (or after 430pm during the week!) is telling me that all charge-offs must be paid & closed prior to closing. I've been asking each othem so many questions and detailing info on our credit profiles for 5-6 days already and this woman just told me this..... Ugh a little discouraged. 


If this is true, than I might as well hold off on apping for a home for another year. Me and DH are in a pyament plan with his 2 CO's from 2006 &2007. [18K and 20K.] We've been paying them off for about 5 months now. With the payment plan, it wont be paid off for at least another 6-7 years, but we planned to squash it in under 12 moinths with our windfall payments (as we did my 2 chargeoffs in 3 months - originally estimated at 3 years of repayment)


Thinking about cancelling my one-on-ones with the other 2 lenders for saturday. i am just terribly disappointed and a bit discouraged.  We can only go with CERTAIN lenders in order to receive 3% of purchase price from the city we live in. so I only have 6 lenders to choose from if we want that benefit. but UGH, im starting to re-think this....

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Valued Contributor
tooleman694
Posts: 2,296
Registered: ‎08-25-2011

Re: All Charge-offs must be paid prior to closing

OMG those are huge. Yeah I dont think anyone would give you a mortgage with those bad boys sitting there.

Frequent Contributor
NewbieReed
Posts: 416
Registered: ‎12-05-2012

Re: All Charge-offs must be paid prior to closing


tooleman694 wrote:

OMG those are huge. Yeah I dont think anyone would give you a mortgage with those bad boys sitting there.


Yea tell me about it!! .. Auto loans from when he was 18 yrs old form Good ol Navy Fed. And of course the man hadno GAP insurance when the cars were totaled.

Starting Score: 526 EXP 09/2012 600 FICO 10/2012 608 EX (lenderpull)11/2012
Current Score: 4/2013 TU FICO 697, 02/2013 EQ 698 FICO (lender) 04/2013 674 Credit Sesame
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[OLD GOALS: For now- 680 on all 3 = GOAL REACHED IN 02/2013}
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Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: All Charge-offs must be paid prior to closing

What do you mean you can only go through certain lenders for 3% purchase price? Is that a downpayment or a credit? Those CO's are really old...I am surprised they are still bugging out over those. Don't give up. Provide some more info so we can see if we can help you.
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Valued Contributor
tooleman694
Posts: 2,296
Registered: ‎08-25-2011

Re: All Charge-offs must be paid prior to closing

They are not old now since they have been paying on em.

Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: All Charge-offs must be paid prior to closing

The most awkward thing is if OP filed a Chapter 13 bankruptcy and rolled those debts into a payment plan, they would be able to get a mortgage with Trustee approval. And through the bankruptcy plan, they would only have to pay part of it. And here OP is, trying to do the RIGHT thing by paying those creditors off old school style and no one will show any love. Makes no sense.
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Frequent Contributor
NewbieReed
Posts: 416
Registered: ‎12-05-2012

Re: All Charge-offs must be paid prior to closing


MovingForward_2012 wrote:
What do you mean you can only go through certain lenders for 3% purchase price? Is that a downpayment or a credit? Those CO's are really old...I am surprised they are still bugging out over those. Don't give up. Provide some more info so we can see if we can help you.

To receive the 3% Assistance form the city -- they'll give us $6000 for downpayment/clsoing costs assistance ona $200K home.
Our downpayment through the MassHousing programis only 3% so thats BIG help!

And yes, the COs are really old. And we've been paying to the CA for a few months in order to get this paid off. We really believe in paying all the debts that we incur, no matter how stupid we were when the debt was incurred.

I am just unsure what the other lenders will say. this one lender is flat out saying that theymust be paid off before closing or they wont touch us. I am worried that the others will soon follow suit.

We havent apped for anythng yet for fear of this very reason and we wanted to just ask them to see whatthey say before we take a HP.

Starting Score: 526 EXP 09/2012 600 FICO 10/2012 608 EX (lenderpull)11/2012
Current Score: 4/2013 TU FICO 697, 02/2013 EQ 698 FICO (lender) 04/2013 674 Credit Sesame
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[OLD GOALS: For now- 680 on all 3 = GOAL REACHED IN 02/2013}
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Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: All Charge-offs must be paid prior to closing

Okay, that makes sense. Are you sure the city will only allow you to go through 3 lenders? Do they have a website that you can go to find a list of lenders?

I know how important that assistance is. We wouldn't be closing later on today without the assistance of our local housing authority and it enabled us to be able to get a much larger house. Does your local housing authority have any programs that may be similar or possibly even better?
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Frequent Contributor
NewbieReed
Posts: 416
Registered: ‎12-05-2012

Re: All Charge-offs must be paid prior to closing


MovingForward_2012 wrote:
Okay, that makes sense. Are you sure the city will only allow you to go through 3 lenders? Do they have a website that you can go to find a list of lenders?

I know how important that assistance is. We wouldn't be closing later on today without the assistance of our local housing authority and it enabled us to be able to get a much larger house. Does your local housing authority have any programs that may be similar or possibly even better?

The city only allows u to go through a list of 8 lenders - 3 of which Im scheduled to meet/talk with this weekend since their websites were the most intuitive and I could understand what their programs actually were.

I know nothing about any better porgram than the one that we are in with the 3% assistance.

Starting Score: 526 EXP 09/2012 600 FICO 10/2012 608 EX (lenderpull)11/2012
Current Score: 4/2013 TU FICO 697, 02/2013 EQ 698 FICO (lender) 04/2013 674 Credit Sesame
NEW GOAL SCORE FOR 2013Breaking into the 700 club
[OLD GOALS: For now- 680 on all 3 = GOAL REACHED IN 02/2013}
Take the FICO Fitness Challenge
App Free since 2.8.13
Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: All Charge-offs must be paid prior to closing

Call your housing authority of your state or check their website. The website for our housing authority is www.chfainfo.com You can go there to see the wide range of programs available. We are doing the CHFA Homeopeners Plus Program where 3% of our downpayment is rolled into second mortgage so we only needed 0.5% down for FHA that was covered by our earnest money. Now get this...the builder is paying our full closing costs in the amount of $8000 as we received a lender credit BUT with the CHFA Homeopeners Plus Program, we could have also rolled all of our closing costs into a the second mortgage if we needed to. There is another great program that they offer where you only have to put 3% down and your PMI is waived if you have a 700 credit score. So I would call your housing authority to see if they have similar programs. Don't give up. There are still more lenders that you haven't spoken to yet and also see what your housing authority has as their programs may be better.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014

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