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Member
JChouston
Posts: 5
Registered: ‎07-30-2008

Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

Hello all. I have a collections ( broken lease) from 2008 for $7470 . It's will fall off next year. My fico is 680. 

Will a underwriter stop me from getting approved. My dti ratios is currently 13%. Since that collection and nightmare from 2008, I have zero lates. All credit cards, personal loan and car payments paid on time. Any advice?

Super Contributor
ShanetheMortgageMan
Posts: 7,377
Registered: ‎09-28-2007

Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

[ Edited ]

1awesomedude wrote:

Charge off's - new rules state if charge off's are present must use capacity testing.  Nothing in FHA guidelines addresses the statue of limitations.  In California, a charge off cannot be pursued through the court system after 4 years from last payment, so essentially once you are past the 4 year SOL in Ca, if creditors ask for the money, you tell them no way, and they have no recourse but to maybe try again. 

 

My question is; if the charge off was more than 4 years ago and outside the Ca SOL laws, does the FHA rules apply when there is not risk of a lien against the property?


Charge-offs are excluded ... the statute of limitations on collections & judgments do not make them exempt from having to be analyzed in the capacity analysis.

Super Contributor
ShanetheMortgageMan
Posts: 7,377
Registered: ‎09-28-2007

Re: FHA..... Disputed Accounts & Collections. UPDATE!!!


JChouston wrote:

Hello all. I have a collections ( broken lease) from 2008 for $7470 . It's will fall off next year. My fico is 680. 

Will a underwriter stop me from getting approved. My dti ratios is currently 13%. Since that collection and nightmare from 2008, I have zero lates. All credit cards, personal loan and car payments paid on time. Any advice?


If you are qualifying for FHA financing then the collection will need to be analyzed using the capacity analysis mentioned at http://ficoforums.myfico.com/t5/Mortgage-Loans/FHA-changing-collection-account-judgments-amp-dispute...

 

If you are qualifying for conventional financing then there isn't any requirement for a capacity analysis.  It'll be up to underwriter's discretion if they want anything to be done with the collection.  The collection is housing related, so that is about as worse of a collection as there could be, but it's also from around 6 years ago so my guess is an underwriter would want a letter of explanation but wouldn't require it to be paid.  Hopefully they don't try to sue you before the statute of limitations runs out.

Member
JChouston
Posts: 5
Registered: ‎07-30-2008

Re: FHA..... Disputed Accounts & Collections. UPDATE!!!

[ Edited ]

Thanks for the reply! I called the apt complex to settle with them directly. They have no record of me ever living there! I asked how is that possible, the manager said they changed computer systems a couple of years ago. I hire Heartlsnd CR to help. They are sending a debt validation letter directly to the complex. I am hopeful I can get this one negative item (huge item) deleted!


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