FHA Loan

[cmunlin97]

Hello,

I am a little nervous about a mortgage I just applied for recently.  My fiancee and I made an offer on a home that was accepted, so the loan is the last piece of the puzzle on our first home.  Her credit is wonderful above 720, mine is at 631 EQ, but is that low, because I had an identity theft case in which someone took out 12 Mortgages in my name in Detroit a few years back.  I've never lived in Detroit, so this is complete fraud.  I've had a court judgment rule that these loans are fraudulently and should be removed from my credit.  The problem is that some have and some haven't, so they are still dragging my score down.  Now the FHA loan we are applying for is approximately $220K.  She makes about $40K and I make roughly $115K per year.  I have about $35K in the bank including investments and she has about $8K, do you think that we will qualify, as I can't stand the unknown and waiting.  Thanks for all your help.  I know many people ask this question, and it may be old to some of you, but I've been lurking on this forum for a while and know there are some experts on here that can give me some good advice. 

[cmunlin97]

Please Help!!!

[RAISEUP]

CMulin-

How I ironic I put an offer in yesterday for $221 K but looking to go FHA and also taking next step to loan process. The others here will chime in I'm sure, but to let you know, you're going to have to provide more information. Such as debt (Car note, credit card payments, etc.,) This is needed in order to determine DTI. I'm sure the explanation on the homes will be a red flag but other factors like your income and down payment may help. Also, FHA may be an option...Good luck

[cmunlin97]

Thanks for the help on that.  To answer the questions about debt, I have a $434 car payment and a $101 student loan and generally pay off my balance on my 3 credit cards but my payments are less than $100 per month.  Outside of my rent those are my only debts I pay month to month.  My fiancee has not debts other than about $100-$200 in CC's per month as she recently paid off her vehicle.  I've applied for an FHA loan.  Also, good luck with your loan and offer.

[Anonymous]

Based on strictly your income, it seems that the monthly payment falls well within your acceptable ratios.  Now, because of the low credit scores, you may be forced to go with FHA which would require you to pay mortgage insurance for 5 years.  Since you already have an accepted contract (I am assuming with earnest money already handed over), that may be your only choice.  Did you get pre-approved prior to offering a contract??

[Anonymous]

First, hindsight is best, but you shouuld always have at least preliminary financing ready before putting in offers.

Here is the problem that I see that may come up.  If you have multiple mortgages dhwoing on your report there is a strong chance that the UW will want all that corrected prior to greenlighting a loan.  There is just too much chance of one of those companies showing you owe them money (unless the mortgages show paid in full and in that case they are not hurting your score).  Also, they may need to count the mortgages into your DTI if they are still showing.  The other big problem (not sure about FHA but definitely with Fannie/Freddie) is that you can't didpute them as they will not buy loans if you have disputes on your credit.  All disputes must be resolved.  Also, having other mortgages on your report may make it look like investment and make buying a house much harder.

Underwriters will overlook some things with good explanations, but it is very hard for them to overlook whole mortgages.  I would get on the phone with these companies and dispute directly through them including sending copies of the court documents certified mail, return reciept.  Then call thema  couple days later and tell them to get it removed ASAP or you will file suit against them for failure to comply.

Again, an UW may overlook all this just with the court papers, but it is an uphill battle and you want these things removed anyways.

[cmunlin97]

Thanks for the information, as I said, some have been removed, but others haven't.  There is no balance showing on the ones that are still on my credit.  As part of the settlement, one mortgage company actually agreed to helping me get all of these removed off my credit, but they haven't been too helpful thus far.  I did get a pre-approval letter before the offer and I have documented all of the steps I have taken to get things removed with the underwriter.  Since we started the process about half of the negative information has been removed from my credit.  I got a call from the UW yesterday to verify I'm applying for the loan, which is part of my fraud alert, and she said they are processing and I should have my answer today, so my fingers are crossed!!!!