FHA and Open Disputes

[Anonymous]

Can I get an FHA loan with open dipsutes on my credit report?

I have three collection accounts that are currently in dispute.

[ShanetheMortgageMan]

Yes it's fine to have accounts in dispute for FHA.  What isn't fine is if you have accounts in dispute and you are going for a conventional loan that'd need to be automated underwritten (which is pretty much all conforming loan programs), Fannie Mae's Desktop Underwriter (DU) and Freddie Mac's Loan Prospector (LP) for some reason will come back with an error saying that a decision could not be made due to accounts in dispute.  Used to be just LP but not too long ago DU became that way too.  FHA uses FHA TOTAL, which is utilized through LP or DU, but when FHA is selected a different set of guidelines (FHA TOTAL guidelines) are put into place rather than conforming guideilnes.

[Anonymous]

That is a great bit of information, I really appreciate that.

My LO told me that we can't get an au done with open disputes, I'm not sure if he's even going to try. We are doing FHA, so it sounds like all I really need to do is find a LO that is willing to work.

Thanks so much.

[Anonymous]

FHA may not require you to close all open disputes but several lenders are requiring that all disputes are closed in order to be approved. I'm currently going through the mortgage approval process and the only thing holding up my application are open disputes.

If you want to save yourself some heartache down the road, I recommend that you get all of your dipustes in order ASAP.

[Anonymous]

Starting that today, the problem is I have no idea how to get the status updated on the credit reports.

[Anonymous]

One more question for ShanetheMortgageMan..

Do all lenders have access to the DU and LP?

Regards.

[Anonymous]

---

@Anonymous wrote:
Starting that today, the problem is I have no idea how to get the status updated on the credit reports.

---

I had to open up disputes with TU & EX to have the "dispute" comments removed......crazy!!!! TU finally removed them after 30 days but EQ to date has not. EX removed them within 24 hours. I also filed a BBB complaint to have them removed but that process is still ongoing.

It's not an easy process so I would get started right away.

Good luck.

[ShanetheMortgageMan]

---

@Anonymous wrote:

One more question for ShanetheMortgageMan..

Do all lenders have access to the DU and LP?

Regards.

---

 

 Yes, it's very likely they should but no guarantees.  Some lenders use a proprietory automated underwriting system (AUS) as well - such as Countrywide, er, Bank of America Home Loans - they use a system called "CLOUT" or "CLUES"... I've actually been able to get some people approved for a conventional loan with CLOUT's system and not with DU or LP, and then also vice versa, LP & DU will approve some that CLOUT would not.  FHA is all the same though.

[Anonymous]

I received notification from my LO that the application was approved through the au process!!!

Thanks for all the feedback.

[ShanetheMortgageMan]

Nice going!