Great board with fantastic information! Been a lurker for quite some time, and finally have a need to post.
We are looking at buying a home. My wife and I went through both of us getting laid off in 2007. For 19 months we went without income. So, we stretched and used credit to live off of. Stupid I know. We ended up not being able to pay. So, we had significant charge offs.
Now, most of my issues are cleared up (paid but still showing), but a couple charge offs that are 5 yrs old. With my credit score at 630 I was hoping to look at FHA. We are in Texas, and understand my wife has to be a part of the process even though she is not working. I looked at her credit, and one of the debtors, CITI, is nowhere to be found on her reports. This was our biggest debt of 25k, and assumed it was charged off. I do find Asset Acceptance Corp as the collector on her report. The acct reads as CITI-1234. Does this mean I should assume the debt was purchased from this group therefor denying any opportunity to purchase under FHA unless we pay/settle this debt?
I'm at a loss of how to interpret. Thank you for any direction you may provide.
We did a non-borrowing spouse FHA loan in Texas. They took used only my credit score, but they counted her debts against my DTI.. Her collections which were BAD they completely ignored.
It won't be an automatic decline, but her owing collection account will play a part in you qualifying.
Read http://ficoforums.myfico.com/t5/Mortgage-Loans/FHA-changing-collection-account-judgments-amp-dispute... about the part on capacity analysis.