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songsofexperience
Frequent Contributor

Ready to apply

I've been waiting for the right time and better scores and I think both have finally come together. I'm applying under the Back to Work program so had to wait 30 days after counseling (tomorrow today!) before I could apply. In the meantime I tried unsuccessfully GWing some old charge offs. I paid all but one card to zero, left one at 8.5%, and have been waiting for 2 weeks for that to update and it finally did. MyFico EQ 08 +10 points to 654 so I trotted off to Equifax to pull my Score Power. 678. Yay. 680 would be better, but I know my middle score may be lower anyway . . . .

 

Now I hope the lender pulls are in line with these. EQ should in line with 678, yes?

 

i still haven't found a lender yet. I know I need to go BtW and I think I'm going to need to do FHA 203K streamline, but I've read so many horror stories about finding lenders/brokers etc not familiar enough with either that I'm afraid the chance of finding someone familiar and good with both is going to be tough!

 

Would you recommend finding a direct lender or using a broker? Although all collections and a judgment are paid my CR still shows

 

- 4 charge-offs from 2010, one settled for less than owed and the rest paid in/after collections.

- satisfied judgment

- 2 paid collections (one related to the judgment)

- 120 day lates on student loans from 2/13 (I know, less than 2 years ago, but at least it's more than one)

 

My DTI is very good, even with a mortgage, I'd be under 28/36.

 

 

 


Starting Score: 2/2013 EQ 535
Current Score My Fico: 5/23 EQ 808| EX 812 | TU 800
Message 1 of 6
5 REPLIES 5
ShanetheMortgageMan
Super Contributor

Re: Ready to apply

The Equifax score here used to be idential to what lenders pulled, but myFICO updated to the current version whereas lenders have not (and probably won't for awhile), so it's no longer identical.

 

While the 203(k) & Back to Work exception can be combined together, not all lenders offer that combo.  A broker may be a better source to finding a lender who does both.


Lately the biggest issue I've seen with people trying to qualify for Back to Work is that their credit started to suffer before the financial event occurred, i.e. they started going late on payments and then job loss occurred and things went south even quicker.  So not sure what event you are trying to get an exception on by using Back to Work (you didn't list a BK, foreclosure, short sale or deed-in-lieu) but make sure that credit was good up until the event occurred.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 2 of 6
songsofexperience
Frequent Contributor

Re: Ready to apply

Thanks Shane.

 

My understanding is that the Score Power from EQ is still Fico 04 and closest to what a lender would pull. I did find a mortgage banker that seems to do both BtW and 203K so hopefully I'll hear what he thinks next week.

 

As to the BtW . . . .

 

I had a foreclosure. I stopped paying April, 2010 and they finally foreclosed (deed was transferred) in March, 2012. It was removed from my CR (I assume the lender stopped reporting) in April, 2014. Although it's off my CR I know it will be found in UW, hence the BtW.

 

I had no credit problems up to the job loss and even during most of the period of unemployment I was current. I did have more than a 20% drop in income before the FC. I lost my job 12/2008 and didn't find a new one until July 2010. I stayed current on all my bills, mortgages, CC payments throughout most of the period of unemployment by using up nearly all my savings. Not only that, I put about $3k into roof work and painting to try to help it sell. That was money thrown away.

 

I contacted my mtg lender in March, before I knew I could only make one more payment and they didn't do much. We tried a short sale, but it was such a bad market. When I finally found a job, it was 1500 miles away so I told them I would do a deed-in-lieu. They refused to do that since they knew I was moving for my job at that point. I still have the emails and letters that went back and forth between me and the lender.

 

  • I stayed current on my CCs until about 2-3 months after I started my new job so I don't know if this will be an issue.

After moving (the company did not pay to relocate) I just didn't have any money and was barely making ends meet. I had to put first, last, security on a rental and the move itself cost several thousand. I probably paid with the CCs since, you know, I'd exhaused over $10k in savings to try to avoid everything that happened anyway.

 

My husband decided he was not making the move with me and asked for a divorce (best thing he ever asked me). I contacted all my CC issuers in Auguest/September of 2010 and everyone said to miss a payment and then they could maybe help me. So I missed a payment and then they all just ended up as charge-offs (4 accounts) in October/November of 2010. I did pay one for less than owed.

 

Because I was "re"-employed when I defaulted on the CCs, will this be an issue?

 

Worst-case scenario I wait until I'm 3 years past FC (March, 2015), but my personal situation is such that it is better for me to do this now.

 

I apprecaite your thoughts/advice!


Starting Score: 2/2013 EQ 535
Current Score My Fico: 5/23 EQ 808| EX 812 | TU 800
Message 3 of 6
ShanetheMortgageMan
Super Contributor

Re: Ready to apply

Well you are correct that missing payments after you got the new job isn't ideal, but I think it'd still have a decent shot of getting approved for the BtW exception as all credit has been clean for the past 24 months.  Underwriter's like it when the economic event was shortly before the derog you are trying to get the exception on, but as long as you are able to clearly articulate the timeline of events leading up to the foreclosure I think you'd have a good case in getting approved.  Underwriter's are so finicky with this program though, that it may take 2-3 lenders before you can find one who is on board.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 4 of 6
songsofexperience
Frequent Contributor

Re: Ready to apply


@ShanetheMortgageMan wrote:

Well you are correct that missing payments after you got the new job isn't ideal, but I think it'd still have a decent shot of getting approved for the BtW exception as all credit has been clean for the past 24 months.  Underwriter's like it when the economic event was shortly before the derog you are trying to get the exception on, but as long as you are able to clearly articulate the timeline of events leading up to the foreclosure I think you'd have a good case in getting approved.  Underwriter's are so finicky with this program though, that it may take 2-3 lenders before you can find one who is on board.


Thanks Shane!

 

Any thoughts on whether or not USDA would accept this - I know they have their "extenuating circumstances" clause, but I've also seen comments here that maybe that means death of a wage-earner etc, not loss of at least 20% income. Since creating my handy-dandy excel spreadsheet comparing MIP for FHA vs USDA, I'm leaning back to USDA! USDA is definitely the cheaper option (although I read that the annual MIP is going up to 0.5% in October . . . .)

 

Do you know of anyone who has closed on a USDA loan less than 3 years from a FC?

 

I've just emailed my state USDA rep for USDA loans so am curious to hear what he says about it.

 

 

 


Starting Score: 2/2013 EQ 535
Current Score My Fico: 5/23 EQ 808| EX 812 | TU 800
Message 5 of 6
ShanetheMortgageMan
Super Contributor

Re: Ready to apply

I've done USDA for people less than 3 years from a foreclosure due to a medical extenuating circumstance, but not from job/income loss.  It was also 4 or 5 years ago, as USDA doesn't make as many exceptions as they used to.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 6 of 6
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