CO Student loans and attempting to buy a home ***UPDATE*** CTC

[Anonymous]

Hello everybody, I've been lurking on here for quite some time and figured I'd start a profile in hopes of getting what information i need.

Story time: Years ago when I was a young dumb 19 year old who had it figured out, I thought having credit cards and taking out student loans for extra spending cash was cool. As most of us were, I was you and dumb. Fast forward a tad.... The banks were calling and wanted their credit cards paid and loans paid due to me no longer being in school. Needless to say I ignored these calls, I was embarasses and didnt know how to confront these things.

Lets speed up a bit... I joined the USMC with goals of doing something to be proud of, and giving myself the opportunity to mature and challenge myself. During my first deployment I saved up enough money to pay all cards, off and get current on my loans (or so I thought but thats later). Before I deployed i gave my car (that I financed) to my mom who I was sure would make the payment we verbally agrred on, I mean its my mom. I come back to find that the car under my name was repossessed. BANG theres a nice jab to the credit score and report. After that first deployment I made it a goal to fix my credit and stop being intimidated by these things. After getting things on track, seperating from the military and landing an amazing job with an amazing company I get a letter in the mail..... from Chase telling me, you owe us roughly $18k but we'll take $12k. I COULDNT BELIEVE THIS. I thought I was paying these but it turned out, over that period I had forgotten completely about these specific loans. It sounds dumb because it is. Thses loans are due to fall off my report early 2017 but i'm actually in the process of buying a home through VeteransUnited. I've been pre approved and found a home i like but now im worried again about geting shut down during underwriting. My current DTI is about 20%. I have not missed a payment on a bill (excluding the aforementioned chase loans) in about 4-5 years.

My question is, do I stand a chance on getting through underwriting? Like all other posts have read, my LO says things look good, just let me know when you find a house. Anyways, give me your input please, Thanks

[2b2rich]

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@Anonymous wrote:

Hello everybody, I've been lurking on here for quite some time and figured I'd start a profile in hopes of getting what information i need.

Story time: Years ago when I was a young dumb 19 year old who had it figured out, I thought having credit cards and taking out student loans for extra spending cash was cool. As most of us were, I was you and dumb. Fast forward a tad.... The banks were calling and wanted their credit cards paid and loans paid due to me no longer being in school. Needless to say I ignored these calls, I was embarasses and didnt know how to confront these things.

Lets speed up a bit... I joined the USMC with goals of doing something to be proud of, and giving myself the opportunity to mature and challenge myself. During my first deployment I saved up enough money to pay all cards, off and get current on my loans (or so I thought but thats later). Before I deployed i gave my car (that I financed) to my mom who I was sure would make the payment we verbally agrred on, I mean its my mom. I come back to find that the car under my name was repossessed. BANG theres a nice jab to the credit score and report. After that first deployment I made it a goal to fix my credit and stop being intimidated by these things. After getting things on track, seperating from the military and landing an amazing job with an amazing company I get a letter in the mail..... from Chase telling me, you owe us roughly $18k but we'll take $12k. I COULDNT BELIEVE THIS. I thought I was paying these but it turned out, over that period I had forgotten completely about these specific loans. It sounds dumb because it is. Thses loans are due to fall off my report early 2017 but i'm actually in the process of buying a home through VeteransUnited. I've been pre approved and found a home i like but now im worried again about geting shut down during underwriting. My current DTI is about 20%. I have not missed a payment on a bill (excluding the aforementioned chase loans) in about 4-5 years.

My question is, do I stand a chance on getting through underwriting? Like all other posts have read, my LO says things look good, just let me know when you find a house. Anyways, give me your input please, Thanks

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Welcome to the forums, and thank you for your service.

I'm guessing that these are private loans, but how are they reporting? Are they reporting as just installments or Student/Education loans?  

What did your LO at VU say about your report, or more specifically these loans?  

[Anonymous]

They're showing as "charged off as bad debt, profit and loss write off"!

I asked if this is a deal breaker

LO said "being blunt, it is not. I'm looking at the report we printed and sent to you and these loans are not on there." He says as long as I have no liens or judgements against me I will be fine". My plan was to get a home and begin a rehabilitation. Thanks for the response

Thoughts?

[2b2rich]

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@Anonymous wrote:
They're showing as "charged off as bad debt, profit and loss write off"!

I asked if this is a deal breaker

LO said "being blunt, it is not. I'm looking at the report we printed and sent to you and these loans are not on there." He says as long as I have no liens or judgements against me I will be fine". My plan was to get a home and begin a rehabilitation. Thanks for the response

Thoughts?

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Have you received a copy of this report he is referring to?
Which report are you personally looking at that shows the loan(s)? ... and is it on all 3 of your reports or just reporting on one or two?

Last question, you don't happen to have a freeze on any of your reports, do you?

The reason I asked that last is because I had one on equifax and VU preappoved me using just the other two reports.  Fortunately for me, EQ was my best score anyway and nothing negative, because the DAY BEFORE it went to the UW, they called me and said they needed to pull EQ because they had to have all 3  (This was less than a week before our closing!)

One more thing to think about is that you must list all debt in the declarations page of the loan application they send you to sign and return.  If you've already received this, and listed it, then it won't matter if it's on your credit report or not.

Hopefully he's right

[Anonymous]

I didn't know of these debts just 60 days ago when I sent that paperwork in. I did see the report they had and didn't see anything relating to these loans. I am looking at trans Union and equifax. And I don't know what a "freeze" is either. I'm hoping he's right too. Did you end up getting approved?

[2b2rich]

Well, I didn't have any problems, mine was pre-approved through automated, and then 24 hours in the UW manual reveiw.

Every loan is different though and my income was cut and dry (no way to fluff VA compensation and SSDI, ya know? )

The only thing(s) on my credit report that I had to write a LOE about was a couple of inquiries that didn't result in credit (I received letters to verify stuff with their fraud dept, but already had enough credit from that app spree so I didn't bother following through with those two), and they wanted a LOE regarding a vehicle I cosigned on.  Wanted to know who the person was to me and why I felt I was not going to end up having to make the payments on it.

Do you think you will be closed before the reports are 90 days old? 

[Anonymous]

The 90 mark was mentioned by LO yesterday and to be honest I'm not sure. Looking at the house for a 3rd time and deciding rather input an offer in or move on. If all else fails, I will just have to wait although I hate paying rent, it is what it is.

[2b2rich]

Well, this advice isn't going to do much good after the fact, but it sounds to me like Chase received a notification from the credit bureaus that there had been a mortgage inquiry hit your reports and they acted on it.

This is EXTREMELY common.  They know that you are actively seeking to purchase a home and that you will be at their mercy.  They know that paying a debt may be a condition of approval.

I have read that a lot of lenders will not make you pay a collection before closing, just because it's a collection (unless still within SOL).. but if the debt puts you over the DTI, ratio, they know you will either pay it or not get approved.

[Anonymous]

That's my main fear. Paying that much would cause issues such as closing costs coverage, furnishing and other fees. I'll do my best to keep everyone posted on this. Like I said, my DTI is pretty freaking good, hopefully I get by.

[Anonymous]

So i put an offer on a home and it was accepted. Loan went to initial UW yesterday so my fingers are crossed. These loans were in fact NOT on the report they pulled. I did see that i had a 90 day late badie on my other student loans which was due to me changing addresses and not rememberring them as they were not auto debit at the time (mail was sent to old address). This was about 19 months ago though so i feel as though I should be ok. My loan officer still feels the same way as well. I have no federally backed debt either. Ive been stressing this entire process but feel that since I have a decent payment history and a DTI of less than 18% i will be ok. Still just nervous.