Help on getting FHA.

Anonymous · ‎04-19-2015

Hello All,

Here are my stats FICO8: EQ 597, TU 620, EX 617, (my mortgage ficos are higher in the 650's)

Bads: 02/2012 BNK, Dismissed 04/12 (I decided not to go through with it), One unpaid tax lien (working on payment), One Collection Account set to fall off 12/2015 (they are reporting as delinquent every month and this held me from pre-approval)

I know my score will jump next month because I had three cards report over the 30% utilization this month since I didn't know the report dates and I pay off my balances each month.

My problem is since I have a BNK on my account, the collection account is hurting me since they are updating delinquency each month and FHA wants to see on time payments post BNK for two years. If I pay the collection account, I'm afraid it won't help my approval status since I still will fail the timely payment test. Also, this is an account I would absolutely only settle on since it was an apartment lease where they fudged up fees when I left.

Do you think settling the collection will hurt me even more? I know the company will not do a pay for delete as they are notorious meanies on the MyFico forums (Hunter Warfield). Do you think it's possible to settle and then apply for early exclusion or send a goodwill letter?

My lease is up in June and the owner does not want to extend an additional six months because of difficulty of renting properties in the winter. I would have to extend an additional year. I'm pushing hard to get these items cleared in the next 30 days and asking him to extend the lease an additional two months so I can get a house.

StartingOver10 · ‎04-19-2015

@Anonymous wrote:
Hello All,

Here are my stats FICO8: EQ 597, TU 620, EX 617, (my mortgage ficos are higher in the 650's)

Bads: 02/2012 BNK, Dismissed 04/12 (I decided not to go through with it), One unpaid tax lien (working on payment), One Collection Account set to fall off 12/2015 (they are reporting as delinquent every month and this held me from pre-approval)

I know my score will jump next month because I had three cards report over the 30% utilization this month since I didn't know the report dates and I pay off my balances each month.

My problem is since I have a BNK on my account, the collection account is hurting me since they are updating delinquency each month and FHA wants to see on time payments post BNK for two years. If I pay the collection account, I'm afraid it won't help my approval status since I still will fail the timely payment test. Also, this is an account I would absolutely only settle on since it was an apartment lease where they fudged up fees when I left.

Do you think settling the collection will hurt me even more? I know the company will not do a pay for delete as they are notorious meanies on the MyFico forums (Hunter Warfield). Do you think it's possible to settle and then apply for early exclusion or send a goodwill letter?

My lease is up in June and the owner does not want to extend an additional six months because of difficulty of renting properties in the winter. I would have to extend an additional year. I'm pushing hard to get these items cleared in the next 30 days and asking him to extend the lease an additional two months so I can get a house.

Your FICO 08s are not used at all so forget them when applying for a mortgage.

Your mortgage scores are in great position for a FHA loan.

I don't know why you would have any issue at all with a PQ except for the rental judgment. That is your issue. Yes, get the settled/paid.

Where have you applied for a PQ?

Anonymous · ‎04-21-2015

I applied with Quicken Loans and they advised me that since the collection agency is reporting a delinquency each month, it affects my ability to be pre-approved for a mortgage since I can't show two years of timely payments from my BNK dismissal date. Even if I settle, I fear that this delinquency will exclude me from the FHA pre-qualification.

I called the OC today regarding the lease since I believe I was only listed as an occupant and never signed the lease agreement. They advised me that they will forward a copy of the lease (I don't think this will happen). It's almost seven years later and my mind is a little fuzzy on the details concerning that rental. I also found out that the collection was sold versus consigned (probably not the right word) which means I know they sold it for pennies/dollar.

I hate that this is ruining my chance of owning a home. I have a 10% DTI, ample reserves and only want to purchase a $60K house although I make enough to qualify for a loan that more than triples that value (not bragging, just showing that I want to purchase something that is more than reasonable with respect to my situation).

I understand that I went through a difficult period and have been diligent in rebuilding my credit. I will happily settle this amount if I know it will get me into a home that I can call my own

Thanks for your response!

StartingOver10 · ‎04-22-2015

Your main problem is that you made application with Quicken. They are not good at handling any bumps in the road - they can handle a very clean file - but nothing that takes any effort. Just my experience with them.

I have a question for you: Did you get a discharge with your BK or a dismissal? It makes a difference.

Visit the Rebuilding Your Credit forum on this board to find out how to handle your lease collection issue. That is something that will need to be handled anyway - especially if it is a judgment and not just a collection. Check your public records so you know for sure.