Help!! Please

[Anonymous]

My husband and I had our credit pulled during the middle of May for a mortgage. We were pre-approved for a FHA mortgage and found a house at the beginning of June. My husbands score was 685 and mine was 680. We do not qualify for a conventional loan because our debit to income ratio is to high with some deferred student loans. We wrote an offer on June 3rd which was accepted with a closing date set for 30 days later July 3rd.
Unknown to us the home was purchased at sheriff's tax sale and the although the sales date was March 22nd, it did not transfer ownership through the assessors office until April 18th. We then found out that you can not obtain Mortgage Insurance on a house which has been flipped in under 90 days per FHA guidelines. There are a few loop holes to this rule, but after researching 13 lenders none of them will close on a FHA mortgage until 90 days has past which will be July 18th since it didn't transfer ownership until April 18th.
We finally came to an agreement with the owner to extend our contract with a closing hopefully by the end of July. However our lender can not set or promise a date as right now our loan is just more or less waiting. They will re-activate our loan on July 18th. Everything has been taken care of already; title search, appraisals, home inspection, employment/asset verification and we were completely approved ready to go. This morning we pulled our credit reports again and an old unknown debt for $1200 has shown up. We will pay this first thing Monday morning but are seriously concerned that if/when they recheck our credit prior to closing since it will be more than two months later this will break our mortgage deal and we won't be able to obtain financing.
Anyone have any ideas? We know this will reset our collection date. We are ok with that. It shouldn't drop the score too much. More worried about a new collection account just showing up that probably won't update to being paid by the time we are trying to close at the end of the month.

Thank you anyone for your thoughts!

[jules0580]

If you can pay in full do a pay for delete. Call the collection company and ask them if they will delete it from your credit report in return for full payment. Most are willing to do that.

[DallasLoanGuy]

FHA 90 DAY FLIP WAIVER
FHA Loan Programs
The following email pertains to the following policy, guidelines or updates: FHA Underwriting Guidelines Freedom Series
FHA has extended the 90 day Flip Waiver through December 31, 2012. We are allowing the use of this waiver on our FHA programs including our FHA Freedom Series. Please keep in mind the following (this is listed in our overlays as well):
All transactions must be arms-length, with no identity of interest between the buyer and the seller or other parties participating in the sales transaction. No pattern of previous flipping is allowed to exist on the subject property. In cases where the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the following conditions are met:
o A required second appraisal must be ordered through RELS.
o All health and safety issues on both appraisals must be addressed and cleared prior to closing.
o The borrower cannot pay for the second appraisal
o Any and all increase in the property above 20% must be documented and explained by the appraiser.
o A home inspection ordered by us is required. (The borrower may be charged for this if properly disclosed by must be ordered by us.)
Loans that meet the FHA exemption requirements do not have to meet these guidelines.

the loan officer can get the credit report updated to show collection paid. that isnt an issue.

the issue is it affecting the score and the underwriting.