06-19-2012 06:59 AM
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. ;-)
06-19-2012 12:34 PM
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.
06-21-2012 06:30 PM
Thank you for your contribution.Can you explain some more about the roll back the proposed dispute accounts rule? We would greatly appreciate it.
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.
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they rescinded the proposed rule.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?
06-22-2012 05:57 AM
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
07-06-2012 01:25 PM
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?
07-06-2012 02:48 PM