I made a silly mistake today

[Anonymous]

I am in the middle of an in-process house loan application at the moment.

We made an offer on a short sale property about a month ago. This was for investment. The sellers accepetd the offer and we are waiting for seller's bank approval. The negotiator on the account has informed the sellers agent that its going to go through and that they are just going through some preliminary  documentation, etc.

On my side, I started the loan application process right after the sellers had accepted the offer. I got pre-approved for a loan too. I just received Good-Faith-Estimate from my lender (for closing costs) and there is a fee on there for $540 for having my credit score lower than 740 (it is currently 695). This is only because of a two year old paid collection. my score used to be 790+ before this collection. I paid it to CA (I know, don't yell) in Jan 2009 and it was originally reported in Dec 2008.

Since I have 25 days to close from the time the bank approves the Short Sale, I tried to act smart (without doing any research first) and started opening disputes with the CRAs today. I thought that if I can get the CRAs to remove this collection, perhaps, I could ask my lender to re-run my report and hopfully, I won't have to pay the $540 dollars as part of the closing costs.

Now, I am finding out on the web that open disputes can be a problem for underwriting and closing. I am crapping my pants right now. How deep am I in the s***hole?

Please help

[Anonymous]

I forgot to mention that:

1) it is a conventional loan

2) my lender already pulled my credit report on 1/13 before they pre-approved me. I saw an inquiry (hard) on my CR too since I monitor it.

[Mark_in_Pasadena]

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@Anonymous wrote:

I am in the middle of an in-process house loan application at the moment.

We made an offer on a short sale property about a month ago. This was for investment. The sellers accepetd the offer and we are waiting for seller's bank approval. The negotiator on the account has informed the sellers agent that its going to go through and that they are just going through some preliminary  documentation, etc.

On my side, I started the loan application process right after the sellers had accepted the offer. I got pre-approved for a loan too. I just received Good-Faith-Estimate from my lender (for closing costs) and there is a fee on there for $540 for having my credit score lower than 740 (it is currently 695). This is only because of a two year old paid collection. my score used to be 790+ before this collection. I paid it to CA (I know, don't yell) in Jan 2009 and it was originally reported in Dec 2008.

Since I have 25 days to close from the time the bank approves the Short Sale, I tried to act smart (without doing any research first) and started opening disputes with the CRAs today. I thought that if I can get the CRAs to remove this collection, perhaps, I could ask my lender to re-run my report and hopfully, I won't have to pay the $540 dollars as part of the closing costs.

Now, I am finding out on the web that open disputes can be a problem for underwriting and closing. I am crapping my pants right now. How deep am I in the s***hole?

Please help

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I know when I was cleaning up my wife's credit report several years ago, I disputed a collection and the collection agency had a policy of not responding to disputes on paid collections (my wife had paid off the collection 1 year prior thinking she was cleaning up her credit by doing so).  Since the collection agency never responded to the dispute, the credit bureau deleted the collection after a certain period of time.  Hopefully such will be the case for you.

Once I did the research on the rebuilding credit forum here, the one unpaid collection left on her credit report I called the collection agency (Webber and something was their name) on their local number in Augoura, CA with *67 to block my number (not 1-800 or they can trace you even with *67) and negotiated a PFD.  The collection was removed from the credit report the next day she ran it.

[ShanetheMortgageMan]

If your loan has disputed accounts the disputes will need to be removed (if you are using conventional) or your loan will be manually underwritten (if FHA) instead of utilizing the automated underwriting system.

You can contact the credit agencies directly and tell them you would like to cancel the dispute, since it was initiated by you they should be able to stop & remove the dispute without getting the creditor involved.

[Anonymous]

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@ShanetheMortgageMan wrote:

If your loan has disputed accounts the disputes will need to be removed (if you are using conventional) or your loan will be manually underwritten (if FHA) instead of utilizing the automated underwriting system.

You can contact the credit agencies directly and tell them you would like to cancel the dispute, since it was initiated by you they should be able to stop & remove the dispute without getting the creditor involved.

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My lender tells me that my current credit report (that they pulled on Jan 13) expires in first week of april and they won't need to pull it again and my current report does not have anything that needs to be resolved. She said this shouldn't be a problem but she will confirm this with her underwriter and will let me know.

Do you think that I should take my chances and see if the timings work out the collection account actually does drop? My hope is that (as you said), I can cancel the disputes any time, if it does become a problem when underwriting (even though lender sayd it won't) since I am the one who initiated them in the first place. Or is it going to be too late by the time CRA involves the Collection Agency and I won't be able to cancel easily any more?

One reason I am disputing is because I GW the collection agency and I received a letter saying that they cannot locate my account and that they need more information. So I called and they transfered me to three people before they located my account. They won't agree to delete tho. I am just hoping that when CRA requests verification, they simply either will not find the account or if they did, they will ignore it since its already paid.

[Anonymous]

If you sent it in Jan then you have 30 days + 5 days mailing to get a response from the CRA's

If you pulled the annual credit report.com free reports then you have 45 days for a response from the CRA's

Hopefully you just went by your report they pulled and you'll have it back in mid feb or so but you could ask the CRA's what is the deadline dates on the disputed items.