NFCU requirements for VA Mortgage

kadampa · ‎05-08-2009

Just found this info, and thought I would post it. I have been trying to find out if I could get approved for a VA loan with Navy Federal before I applied, because I felt I was close, and would rather wait a couple of more months, that get declined.

I got the runaround when I call their mortgage department initially. "Can't tell you anything until we pull your credit, yada yada." I then filled out an application for their Personal Finance program. This is basically credit counseling, similiar to Consumer Credit Counseling, except you are likely to get a CC after working through the program.

When the lady from Personal Finance called me back, I told her I just wanted help getting approved for a mortgage, and needed to know whether my credit was good enough. She explained that this wasn't what she did, but would ask a couple of mortgage underwriters in her office!

Next day she calls back with the goods. Awesome lady.

Anyway, right now this is what NFCU requires.

1. If you have derogs, you have to have two years without a late payment.

2. With no derogs, a couple of lates are OK.

3. No specific FICO score required.

I assume you have to have some open accounts in good standing, but they didn't mention anything specific, and I didn't ask, as I am good to go in that area.

Hope this helps someone. I had a heck of a time getting specifics on VA requirements from anyone.

nathan · ‎05-09-2009

If that is their requirement, then I am screwed. I paid a 3 yrs old collection for $146 in april 09 and guess what,the collection account updated as paid, but with a 120 late derog. This account was not reporting any lates before i paid it and I got severely punished for paying it. This dropped my eq from 661 to 636. This derog remarks is only on eq, tu and exp just reports as a paid collection. I have other two unpaid ca that are 3-4 yrs old for about $550 and these ca are out of luck because I will not pay them unless they agree to delete. I wonder what the lo will think about the lates showing only on eq and not the other cra. If I dont make it through au, I hope manual review will see the bogus reporting. Navy fed is my first choice for a va loan, but i am also considering penfed and usaa when I apply in Nov. In fact i may apply to all three the same day and then if approved by all, I will compare all three gfe and then decide the winner. Navyfed charges $250 for application fees so you want to be very sure you will approved or else the dough is gone. Penfed charges less than 100 bucks, I don't know about usaa. Please update when you apply and good luck.

kadampa · ‎05-09-2009

good luck to you too. Hopefully you are right, and the lo will take into account what happened with the account you paid off. I don't know how far you are from an NFCU branch, but I think I am going to go in person, credit reports in hand, when I apply. I'm about 2 hrs from ATL and they have a few branches.

SanDiegoEngineer · ‎05-10-2009

@nathan wrote:
If that is their requirement, then I am screwed. I paid a 3 yrs old collection for $146 in april 09 and guess what,the collection account updated as paid, but with a 120 late derog. This account was not reporting any lates before i paid it and I got severely punished for paying it. This dropped my eq from 661 to 636. This derog remarks is only on eq, tu and exp just reports as a paid collection. I have other two unpaid ca that are 3-4 yrs old for about $550 and these ca are out of luck because I will not pay them unless they agree to delete. I wonder what the lo will think about the lates showing only on eq and not the other cra. If I dont make it through au, I hope manual review will see the bogus reporting. Navy fed is my first choice for a va loan, but i am also considering penfed and usaa when I apply in Nov. In fact i may apply to all three the same day and then if approved by all, I will compare all three gfe and then decide the winner. Navyfed charges $250 for application fees so you want to be very sure you will approved or else the dough is gone. Penfed charges less than 100 bucks, I don't know about usaa. Please update when you apply and good luck.

I think you should be ok with this. I think the info the credit union will pull will show the initial delinquency date. By definition, a collection account is always late, and at least the loan officers I've worked with have always been able to factor out any "late payments" showing on a collection account (all of mine are well past the 2 year "clean history" requirement that they look for, but several update regularly with new "late payment" dings). Pretty sure they're looking for no new collection accounts opened during that period, and no late payments on any revolving/installment accounts.

The reason you don't want to pay collections unless a LO tells you to (and usually at closing) is that, as you found out, the way FICO scores work, you can actually lose points by paying a collection - however, the hit you took doesn't look like it would drop you below any thresholds (620 being the most common one for governement programs like VA/FHA/USDA).

Bear in mind, I'm not in the industry, this is just what I've picked up from the LO's and mortgage brokers I've worked with over the past year or so.

Anonymous · ‎07-09-2009

As of last week when seeking a NFCU VA loan and while asking general questions, we were told by the loan consultant at the branch that they require 680 min fico average, all past dues or collections or chargeoffs must be paid off or removed from report, and even though you probably wouldn't pay closing, to at least have the 4 percent in the bank.

pretty steep banking /credit union rules if you ask me but from a broker's advice, these days that is what the banks and credit unions are doing, going above the VA regs just to secure themselves.

I hope your experience is more pleasant, I think we'll be going somewhere else.