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Do old chargeoffs/collections and lates matter for FHA?

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igids1
Regular Contributor

Do old chargeoffs/collections and lates matter for FHA?

Long story short....Credit from 2008/2009 is pretty bad. 3 Chargeoffs, and some student loan defaults. All taken care of now. Lots of 30/60/90/120 from back then. Will that be overlooked as long as there is 1 year of clean history and scores over 620?

 

Also, I am looking for clarification. Say something went into collections in 2009, and I paid it today. Does that start the 1 year of clean history? So If I pay an old collection today, do I have to wait another year to be clean for one year?

Message 1 of 7
6 REPLIES 6
How2increase
Regular Contributor

Re: Do old chargeoffs/collections and lates matter for FHA?

As long as those things are taken care of and you have a strong payment history after that, you should be fine. if anything a good LOE will probably work well.

 

As far as the collection, I've always been told to NOT touch them, as it will update as a new collection. Did you in fact pay it? Or just thinking about it? 

Jan 2012 TU 517 EX(fako) 524 EQ 470
Current score LENDER PULL TU 652 EX 641 EQ 617
Yayy we made it!!!
Message 2 of 7
Shogun
Moderator Emeritus

Re: Do old chargeoffs/collections and lates matter for FHA?


@How2increase wrote:

As long as those things are taken care of and you have a strong payment history after that, you should be fine. if anything a good LOE will probably work well.

 

As far as the collection, I've always been told to NOT touch them, as it will update as a new collection. Did you in fact pay it? Or just thinking about it? 


If they are paid and your scores are OK don't bother with them until after your mortgage loan processs is done and you have the house.  If you put those accounts into dispute it can be a pain to get those off for the mortgage.

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
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Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Message 3 of 7
igids1
Regular Contributor

Re: Do old chargeoffs/collections and lates matter for FHA?

I have two open collections. They are from accounts that went delinquent back in 2008. Im not being contacted by the CA.s for them. I paid off one collection in Feb of this year. The collection I paid in Feb was also from a delinquent account in 2008. It only shows as a collection 2/2012  Nothing before, nothing after. In other words I do not have 48 months of CO. Just 1 month with a CO, Feb 2012. 

 

 

Message 4 of 7
imandy
Valued Member

Re: Do old chargeoffs/collections and lates matter for FHA?

You're going to have a hard time with two open collections. Anything non-medican more than $1k will need to be paid regardless of how old it is (if it's on your report)

Message 5 of 7
igids1
Regular Contributor

Re: Do old chargeoffs/collections and lates matter for FHA?

I thought the 1k was a PROPOSED change, that was redacted? 

Message 6 of 7
imandy
Valued Member

Re: Do old chargeoffs/collections and lates matter for FHA?

I'm pretty sure the FHA rule is still "Officially" Medical collections less than 1k... but FHA lenders can have rules that are more strict (and most do) so 90% of them probably won't allow any collections whatsoever.

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