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Super Contributor
Posts: 6,624
Registered: ‎07-03-2007
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!


co791 wrote:

Keep in mind that every lender has their own set of rules......FHA is only the insurer.  Depending on the lender you still may have to pay down those collections despite the change in FHA policy.


 

This has always been the case.

If the lender require collections to be paid..... Find another lender.

 

You can ALWAYS ask up front BEFORE application if that bank requires collections to be paid. <= If they waffle at all on the topic, find another lender and apply with them. ;-)

 

* While I try to visit the forum often, please feel free to contact me directly with a link to your post if I fail to answer a follow up question.

* Lending across the entire 'Great State of Texas' since 2004
Established Member
Posts: 21
Registered: ‎06-08-2012
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

Is there a difference in the handling of disputed accounts and if so, what is it?

New Contributor
Posts: 68
Registered: ‎04-16-2012
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

Per FHA previous guidelines...

If the credit report reveals that the borrower is disputing any credit accounts or public records, the mortgage application must be referred to a DE underwriter for review.

 

From there it would be up to the underwriter.  To my understand they request that you remove the comment unless it is more than 2 years old. 

Frequent Contributor
Posts: 364
Registered: ‎04-04-2012
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

I guess this is great news,the lesser of 2 evils.Thanks for sharing!!

Read and read...and then....read some more....


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Frequent Contributor
Posts: 364
Registered: ‎04-04-2012
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

Thank you for your contribution.Can you explain some more about the roll back the proposed dispute accounts rule? We would greatly appreciate it.

Read and read...and then....read some more....


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Super Contributor
Posts: 6,624
Registered: ‎07-03-2007
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!


golo wrote:

Thank you for your contribution.Can you explain some more about the roll back the proposed dispute accounts rule? We would greatly appreciate it.


old rule:

If the credit report reveals that the borrower is
disputing any credit accounts or public records,
the mortgage application must be referred to a
DE underwriter for review.

 

 

proposed rule:

If the Automated Underwriting System using the TOTAL
Mortgage Scorecard rates the mortgage loan application as an
Accept, the mortgage application will no longer be referred to a
DE underwriter for review due to disputed accounts, as long as
these accounts meet both of the following conditions:
The total outstanding balance of all disputed credit
accounts or collections are less than $1,000,and
Disputed credit accounts or collections are aged two
years from date of last activity as indicated on the most
recent credit report.

 

they rescinded the proposed rule.

not it is back to underwriter discretion.

 

my internal guidelines say that the disputes have to be 'resolved'

many banks are the same.

 

best advice? => get all of the disputes resolved before you get your credit pulled. <= this gives us a valid credit score.

 

 

also.... the bureaus might leave a 'statement' on the account saying that you dispute the acccount. this doesnt mean that the account is actually in dispute.... it means that you dont agree and are saying so with a statement.

bad news about that: underwriter cannot tell if it is an ongoing dispute or a statement.... so you will have to get the statemeent removed as well.

 

best practice with regards to disputes:  contact each bureau and have them remove ALL DISPUTES and STATEMENTS OF DISPUTES from the reports.

 

 

did that make sense?

 

* While I try to visit the forum often, please feel free to contact me directly with a link to your post if I fail to answer a follow up question.

* Lending across the entire 'Great State of Texas' since 2004
Contributor
Posts: 90
Registered: ‎03-29-2010
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

Thanks for taking the time to write the detailed explanation.

 

I'm assuming the "new rule" was causing make deals to fall apart, and for that reason they decided to cancel it


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Frequent Contributor
Posts: 364
Registered: ‎04-04-2012
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

Thank you very much Dallas! :smileyhappy:

Read and read...and then....read some more....


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Member
Posts: 8
Registered: ‎07-04-2012
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

I have 2 old car repossessions that are 3-5 years old. I have been current on all bills paid in the past 2 years a long with the car note. EX: 628, EQ;609, and TR: 621. Do you know if you can get a loan with these showing as having a balance? 

Senior Contributor
Posts: 3,889
Registered: ‎05-24-2011
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Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

If they go by DOLA - what do you do about a CA or other creditor that continues to update the account every month? There would be no way to 'age out' the two years. That's a bummer for some out there.
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