FHA mortgage loan approval with 6 year old unpaid auto repo

[Anonymous]

I have a 6 year old auto repo that is not paid that never went to judgement and has been in collections with a collections agency.  On the credit report it shows as a collections for 48k. Are there any lenders that will approve me for an FHA mortgage without paying this off?  Will this drop off my report after 7 years based on Fair Credit Reporting Act?

Thanks for any help you can give me.

[Anonymous]

648 experian...

Quicken Loan officer would accept 5 percent of the 48k on top of down to pay the loan.

Another agent told me i had to pay it off regardless and will show up on my report for more than 10 years.

Another agent was unsure...

But to all 3 of them this is my only roadblock in my qualification...

I will refuse to pay this loan off regardless of settlement as this has already affected me for 6 years and may have told me not to touch it at all...

My options are either file chapter 7 and wait 2 years...(loan agent recommendation), or wait until next year for it to drop off...

Anybody know if this will drop off?

[Anonymous]

I don't believe that type of collection will drop off until paid. I may be wrong but I've seen other people in similar situations that it didn't drop off at all and it was more than 10-20+ years. It's a high amount though so I can understand you not wanting to pay.

[Anonymous]

Hello- I am a mortgage processor, per FHA guidelines regarding judgments you have to pay it off, or establish a repayment plan however with the repayment plan you have to have made at least 3 payments towards the plan. Even if it falls off your credit it will mostly show up on title. The lender HAVE to follow FHA guidelines if you are going FHA

[Anonymous]

Thank you Tippy4u2006 for the reply.

The account in collections does NOT have a judgement against it though.  Its an open collections.  Orginal date of deliquency is 9/1/2008, account was then sold and open by collection agency on 1/1/2012 and updated 2/1/2012.  Does what you are saying fall inline with an unpaid w/ no judgment accout as well?

Per Fair Credit Reporting Act:

http://www.law.cornell.edu/uscode/text/15/1681c    see (A)(4)

Because this is not a judement and is beyond the Statute of Limitaion in both the state of CA and NV a judgement may never be passed on it.  Is this correct?

[Anonymous]

---

@Anonymous wrote:

Thank you Tippy4u2006 for the reply.

The account in collections does NOT have a judgement against it though.  Its an open collections.  Orginal date of deliquency is 9/1/2008, account was then sold and open by collection agency on 1/1/2012 and updated 2/1/2012.  Does what you are saying fall inline with an unpaid w/ no judgment accout as well?

Per Fair Credit Reporting Act:

http://www.law.cornell.edu/uscode/text/15/1681c    see (A)(4)

Because this is not a judement and is beyond the Statute of Limitaion in both the state of CA and NV a judgement may never be passed on it.  Is this correct?

---

Yes and no. A default judgment may very well be obtained if the defendant fails to assert his SOL rights in court. The judge ain't gonna do it for ya...

[Anonymous]

Understood, given that the account has NOT gone into judgement and SOL is exercised in court...will the debt drop off the CR? And if so, what timeline would be used? The original Debt date or the newer collection agency debt?

[Anonymous]

---

@Anonymous wrote:

Understood, given that the account has NOT gone into judgement and SOL is exercised in court...will the debt drop off the CR? And if so, what timeline would be used? The original Debt date or the newer collection agency debt?

---

OK- If it's NOT a judgment my next question is it charged off? the reason I asked is because FHA guidelines also you are not required to payoff any charge-off's or Medical collections, however any active collections (not charged off ot medical) that is over $1,999 you have to pay or establish a repayment plan. if the account is gonna fall off soon I say LET IT only because of the high balance. ALSO please remember it falls off after 7 years from the FIRST DATE OF DELIQUENCY.