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Posts: 10
Registered: ‎12-22-2012
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Didn't disclose an installment agreement - is this a problem?

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I'm currently in Escrow with Wells Fargo.  My application was instantly approved and now has to go to underwriting where they verify my income and etc.  I'm nervous because I didn't disclose my installment agreement with IRS from 2005 and my Bill Me Later account.  The loan officer didn't ask nor did the application.  My credit report doesn't show these items and was informed that items not shown on the credit report doesn't have to be counted.  I'm aware that they request transcripts from IRS for the past 3 years, so don't know if my 2005 installment agreement that I'm still currently paying will come up.  I'm this close to closing and hope that this doesn't hurt me.  Please advise

 

 

 

[revanthony5, I split your message off to form a new thread here.  Lel, FICO Forums moderator]

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Posts: 7,225
Registered: ‎09-16-2011
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Re: Didn't disclose an installment agreement - is this a problem?


revanthony5 wrote:

I'm currently in Escrow with Wells Fargo.  My application was instantly approved and now has to go to underwriting where they verify my income and etc.  I'm nervous because I didn't disclose my installment agreement with IRS from 2005 and my Bill Me Later account.  The loan officer didn't ask nor did the application.  My credit report doesn't show these items and was informed that items not shown on the credit report doesn't have to be counted.  I'm aware that they request transcripts from IRS for the past 3 years, so don't know if my 2005 installment agreement that I'm still currently paying will come up.  I'm this close to closing and hope that this doesn't hurt me.  Please advise

 

 

 

[revanthony5, I split your message off to form a new thread here.  Lel, FICO Forums moderator]


 

You should disclose the installment agreement because it will likely come up when they do the records searching. How much is the payment?

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New Member
Posts: 10
Registered: ‎12-22-2012
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Re: Didn't disclose an installment agreement - is this a problem?

My installment agreement is $100 a month.  They only ask for the past 3 years, so I don't feel the need, but worried because I'm sooo close to closing.

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Re: Didn't disclose an installment agreement - is this a problem?


revanthony5 wrote:

My installment agreement is $100 a month.  They only ask for the past 3 years, so I don't feel the need, but worried because I'm sooo close to closing.


I would think that this would need to be disclosed in Section VI of the Uniform Residential Loan Application as a liability.  Like webhopper said, this will almost definitely turn up during the title search process.
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Registered: ‎11-30-2012
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Re: Didn't disclose an installment agreement - is this a problem?


revanthony5 wrote:

My installment agreement is $100 a month.  They only ask for the past 3 years, so I don't feel the need, but worried because I'm sooo close to closing.


I don't understand what you mean by "They only ask for the past 3 years"...3 years of what? Installments that started only the in the past 3 years? That is not true...so if you financed a car for 60 months and you're on month 38, you wouldn't count that as a monthly debt? Unless I'm not understanding what you are saying.

 

Why did you not disclose it? Are you tight on the DTI? Do you have a judgment/lien against you for the taxes or is there just a payment plan in place? If there is no lien/judgment they may not find out about it, not sure.

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Re: Didn't disclose an installment agreement - is this a problem?

Yes, not disclosing debt on a loan application is a problem.  Contact your LO right away. Let them know all about all of your outstanding debt and associated payments. The loan application requires you to disclose all of your debt., it is not limited to a time period of debt incurred within three years. If you are making payments, the payment and the balance need to be disclosed in writing on the loan application.

 

If you review the form again (1003) there is a spot for each debt to be listed individually. Believe me, if you have more payments than what can fit on the form, there are additional pages that can be added. It is fraud to not disclose debt in order to induce the lender to make the loan for you. Make sure you contact your LO right away to straighten out this misunderstanding.

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Registered: ‎12-22-2012
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Re: Didn't disclose an installment agreement - is this a problem?

I didn't disclose this information because it wasn't asked or requested.  It's an installment agreement for taxes owed in 2005.  It doesn't show on my credit report and I didn't want this included in my debt to ratio.  Wells fargo only requested 2009, 2010, 2011 tax transcripts, do don't know if they will find out about my 2005 taxes.  I have gone through preapproval and received an approval through their automated underwriting system in which the loan officer does with you right there.  I don't know what to do.

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Re: Didn't disclose an installment agreement - is this a problem?

I was also told that you only have to report debt that appears on your credit report and that they can't count debt that doesn't appear.

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Re: Didn't disclose an installment agreement - is this a problem?

The debt should be disclosed, if look at the uniform residential loan application form there is a section where you list all monthly obligations. Even things like child support payments and alimony payments should be disclosed even though they may not show up on a credit report, they are still an obligation. Being in a tax payment plan may also put you on the federal debt caivrs list which would make it impossible to get a loan.

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Posts: 7,225
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Re: Didn't disclose an installment agreement - is this a problem?

The section appears on page 2 of the application and is listed as liabilities and pledged assets. As StartingOver10 indicated, continuation sheets are available if you run out of room. (I had a continuation sheet when I did my application in sept 2011)

The only type of payment you don't have to count is a loan that is pledged or collateralized by the borrowers own liquid assets, such as a loan secured by a CD or a 401k

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