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Charge Off's

Regular Contributor

Charge Off's

Would like to purchase around June. Scores are in siggy but we have 2 charge off's on our CR from 2007 & 2008 when I got laid off. They are unpaid. Do you think this will be an issue ? They total around 20K between the two. They're 5+ years old and we were just gonna let them fall off but if we can't get a mortgage, this may change things......

 

Anyone have any experience with this ?

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
16 REPLIES
Regular Contributor

Re: Charge Off's

Prior to me being approved for my mortgage ALL past due collections and balances had to be paid before I was approved. Do you know what your current scores are? Are they good enough for approval even with the charge offs?

Regular Contributor

Re: Charge Off's

Depends on your type of loan and the lender.  FHA requires collections over 1k to be paid off. Conventional loans are different, lender my have and condition that you pay collections off.  WIth that amount of unpaid Charge Offs I think you may run into some issues. Are you at least in a state that has a SOL under 5 years?

I have a friend who got a home and had a 3.8k unpaid CO. He had to write a LoE to explain why his account was a CO.

Regular Contributor

Re: Charge Off's


jmack711 wrote:

Prior to me being approved for my mortgage ALL past due collections and balances had to be paid before I was approved. Do you know what your current scores are? Are they good enough for approval even with the charge offs?


Yes, I'm at 660/634/596 so I'm good for FHA. No collections at all, the charge off's are both showing as trade lines with zero balances with the amount 13k charged off. It would take all of our down payment $$ to settle it.....

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
Valued Contributor

Re: Charge Off's

I have an unpaid collection from 2009 for $1100. All I had to do was write a letter of explanation; it did not have to paid. My mid fico is 703. If your score is not borderline (I can't see your siggy on my phone), the UW may let one late or one collection or one CO slide. But I think whether the UW does this or not, is based upon the amount in the case of a collection or charge off, and based on the serious of the late (30 days, 60, 90...). Because the balance is so high, they will probably require that it is paid and that may or may not be reconciled at closing.
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! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Valued Contributor

Re: Charge Off's

You say you are good for FHA with a mid fico of 634. Did you find a lender that has a min requirement of 620 already?
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! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Regular Contributor

Re: Charge Off's

It's actually 2 voluntary reposessions that happened in 07 & 08. SOL is up so no threat of being sued. 

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
Regular Contributor

Re: Charge Off's


MovingForward_2012 wrote:
You say you are good for FHA with a mid fico of 634. Did you find a lender that has a min requirement of 620 already?

Yep, found one that does a min fico of 620 but he says he won't know about the charge off's until it goes to UW. That just seems backwards to me.....

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
New Contributor

Re: Charge Off's

You would think a LO would have at least an IDEA if this is going to be a problem or not. Hopefully one of our LO members can chime in with some experience in this situation.

Lender Pull EQ 745 EX 734 TU 722
Regular Contributor

Re: Charge Off's


BCullum wrote:

You would think a LO would have at least an IDEA if this is going to be a problem or not. Hopefully one of our LO members can chime in with some experience in this situation.


I agree ! I would prefer NOT to fall in love with a house and get my family all excited and then find out it won't work. Seems like a lot of wasted time (and money) on both sides. 

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One