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I'm in desperate need of advice. I am signing docs for my FHA loan on Monday or Tuesday and closing on Thursday or Friday. I have great credit scores (mid 700s) and super low balances on my credit cards ($149 total out of $4600 available). The 1 account (credit card) with a balance of $149, has a remark stating, "consumer disputes account" or something to that effect. I disputed the account because my credit limit was reported incorrectly (too low). However, I just stumbled across a post online about the FHA requirements regarding disputed accounts and am wondering how this is going to impact me. The $149 will in no way affect my DTI or my scores, so how crucial is it I get this wording resolved before closing? Had I known it could negatively impact me, I would've just let it be.
I came across Shane's post with all the numbers to contact the various bureaus to try to get it removed ASAP and will get on that first thing tomorrow morning. However, if that doesn't work, just curious what the chances are it'll ruin everything. I'm kinda scared to ask my loan officer. Thanks for any advice you can offer!
If it was me I would leave it be and let the UW and/or LO guide me in the direction of removing it.
My advice is to have your loan officer speak to the underwriter. Ive spoken to 3 different lenders, two were loan officers, one was the actual underwriter.
1 loan officer told me the disputes would be a problem and absolutely had to be removed. After pulling my credit, said they were not a problem. Same loan officer said my outstanding negative account must be paid prior to getting pre-approval, and that paying it would not negatively affect my credit (its five years since date of last activity)
2 nd loan officer said outstanding balance would have to be paid prior to closing, but score would rebound after closing. Did not know about disputes. Questioned further, he is going to speak to loan officer.
3- The actual underwriter said all disputes are reviewed, but if balance is 0, no issue at all. Actual underwriter suggested paying outstanding balance at closing, so as not to negatively impact score.
My point being, by asking here, you have almost no way of knowing what the actual person you are going to be dealing with is going to want. Its best to ask them directly.
If this was an issue it would've been identified by the underwriter when they initially reviewed your loan, and if you are a couple days away from signing loan documents then it's probably a non-issue. You could go ahead and get it removed as a safety precaution, but I suspect that at this point you are going to be fine.