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Collections during underwriter

New Contributor

Collections during underwriter

I have a situation for friend of mine..

 

His FHA loan approved. Closing is by end of May. He suddenly got a letter from collection owing $50. The collection agency said they have not reported to any bureaus yet. Hearing this, my friend paid the $50. Will this ever showing up on credit report or reduce points when his credit is pulled at closing ?? Please advise..he is terribly upset..

Message 1 of 9
8 REPLIES
Regular Contributor

Re: Collections during underwriter

If they haven't reported, its possible they wont since its pif now. Question is if the original creditor has reported the balance transferred to collections. Unless he is on the knifes edge for approval i doubt it would derail his approval even if it did report
Message 2 of 9
New Contributor

Re: Collections during underwriter

The letter was dispatached on 4/12 and he received 4/20. In the meantime, his lender pull his credit report the second time on 4/14 since the first one already past 90 days. The second credit report did not show any collections and infact bumped up his score. so given this date timings, do you he is okay?

Message 3 of 9
Regular Contributor

Re: Collections during underwriter

Yea they won't pull again if he closing in may
Message 4 of 9
New Contributor

Re: Collections during underwriter

Incase they pull a soft one, does soft pull show collections?

Message 5 of 9
Regular Contributor

Re: Collections during underwriter

What collection company was it? Who was the OC?

 

Usually a collection company can not report during the 30 day validation period.  This is the first 30 days.  PIF would mean no validation is needed seeing he validated the debt by payment.

 

If they report it, I don't thin it would be reported for 30-45 days.  Because the letter date would be the statement date and then you have your reporting date when they report which could be the end of month.

 

But honestly I don't think a PIF would appear for $50 on a collection when paid the next day.

Starting Score: May 23, 2016 EQ 537 TU 518 EX 548
Recent Score: November 29 2017 EQ 710 TU 680 EX 706
Goal Score: 720
Current Vantage 3.0: 706
Mortgage Scores August 18 2017: EQ5 684 TU4 692 EX2 690
Message 6 of 9
Established Contributor

Re: Collections during underwriter

[Incase they pull a soft one, does soft pull show collections?]

Yes a soft pull will show anything currently on your report, except soft pulls from others ( with some exceptions) and will not show any credit scores.
Message 7 of 9
New Contributor

Re: Collections during underwriter

collector sent first letter but not on credit report. They have given 30 days to respond. But if he goes and makes the payment (collector said they have not reported to credit bureau) right away, does that mean this will never go into his credit report. Period?

Message 8 of 9
Super Contributor

Re: Collections during underwriter

if it gets added to credit it will show on the soft pull. and every lender i know will do a soft pull.

 

 

Retired Lender
Message 9 of 9