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FHA Loan, FICO Score, and Child Support Arrears on Credit Report

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Thanatosnyc
New Member

FHA Loan, FICO Score, and Child Support Arrears on Credit Report

Hello-

 

I have a bit of a tough situation. I went through a divorce 6 years ago, and was unemployed for 18 months shortly after. Due to my unemployment, I fell behind on Child Support payments to the tune of $25,000. My state agency declared this to the Credit Bureaus (according to their site) in March of 2008.

 

I have since made arrangements to pay the arrears on top of my monthly obligation, have paid on time every year since 2008,( including arrears)  and have  even made extra payments to catch up, reducing my arrears from $25K to only $9,000.  

 

This is great and all, but I am now looking at qualifying for an FHA loan and was told that I need to have a credit report clear of any negative reported collection accounts for TWO years. I would be clear if the arrears had appeared back in 2008, but according to TransUnion it hit their systems in SEPTEMBER 2012! Now I have to wait until September 2014 to qualify for the loan. Can I fight the TIME when it was reported and have them take it off or refelct the 2008 date?

 

Frustrating. 

Message 1 of 8
7 REPLIES 7
DallasLoanGuy
Super Contributor

Re: FHA Loan, FICO Score, and Child Support Arrears on Credit Report

try another lender.

 

i have seen loans close with child support in arrears..... if the payments are being made on time.

 

 

Retired Lender
Message 2 of 8
Thanatosnyc
New Member

Re: FHA Loan, FICO Score, and Child Support Arrears on Credit Report

Thanks, DallasLoanGuy-

 

I went through QuickenLoans (I don't know if I can mention speficic companies here on the forum) and was told that it was FHA policy that if there was any negative collection posted on the credit report, it had to be two years removed, otherwise it was an immediate turn down. So its not so muc the arrears part but the timing of when it was reported to the credit agency. Any insight there?

Message 3 of 8
Thanatosnyc
New Member

Re: FHA Loan, FICO Score, and Child Support Arrears on Credit Report

Thanks DallasLoanGuy-

 

Ii's not so much the arrears, but the timing of when it was reported. I was told by QuickenLoans expert (don't know if I'm allowed to mention company names on the forum) that it was FHA policy that any collections or negative information had to be two years in the past before being considered. My state agency says they reported to credit agency in 2008 but it is showing up in TransUnion as September 2012.  So its not so much the amount or payment of the arrears, but rather the timing in TransUnion is showing it. Have you ever heard of this FHA timing regulation, is there a way to fight it (ask TransUnion to date it back to 2008) or is this something I have to wait out? 

 

 

Message 4 of 8
DallasLoanGuy
Super Contributor

Re: FHA Loan, FICO Score, and Child Support Arrears on Credit Report

there are fha guidelines

there are lender guidelines

 

lenders add their own guidelines to fha guidelines. these are called lender guideline overlays.

 

i have seen deals like your done. but it has to be 'tight'

 

Retired Lender
Message 5 of 8
Thanatosnyc
New Member

Re: FHA Loan, FICO Score, and Child Support Arrears on Credit Report

When you say "tight"....what does that mean?

 

In other words, if the lender approves they can override the FHA? Or is it a separate loan altogether? 

 

I was attempting FHA because of the lower amount of money down.

 

Everything else should be ok. I'm trying to apply with my fiancee. Our combined income is 130K + and her credit is  pretty decent (695). With this situation my credit got dropped to 629 on TransUnion. (690 on Experien,etc.)

Message 6 of 8
Thanatosnyc
New Member

Re: FHA Loan, FICO Score, and Child Support Arrears on Credit Report

Also, is there a specific type of lender I should be speaking with? I don't want to go to ten different lenders only to have them turn me away and tell me the same thing. QuickenLoans pulled my credit report today, and I'm afraid if I go to whole bunch it will just drop my score further because of the amount of inquiries on my credit. 

 

Should I assume my rate is going to be pretty high, even if someone approves me considering my situation?

Message 7 of 8
DallasLoanGuy
Super Contributor

Re: FHA Loan, FICO Score, and Child Support Arrears on Credit Report


@Thanatosnyc wrote:

When you say "tight"....what does that mean?  every payment to the arrearage(including extra payments) better be on time.

 

In other words, if the lender approves they can override the FHA? no. fha allows this. some lenders dont. you dont override fha Or is it a separate loan altogether? 

 

I was attempting FHA because of the lower amount of money down.

 

Everything else should be ok. I'm trying to apply with my fiancee. Our combined income is 130K + and her credit is  pretty decent (695). With this situation my credit got dropped to 629 on TransUnion. (690 on Experien,etc.)


apply.

if they give you flak.... start shopping. no need to apply everywhere.... just share the child support stuff to each lender. many will say no..... but it can be done. document the payments 100%.

Retired Lender
Message 8 of 8
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