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Regular Contributor
Posts: 172
Registered: ‎07-06-2011
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Under contract but honestly is there any chance of approval? *UDPATE after inspection*

[ Edited ]

Pre-approved last week and offer accepted Friday.  Mid score 642 for a USDA loan.

 

Chapter 7 BK in 2005

 

A couple charge-offs (HSBC and two cell phone contracts broken) and medical collections from 2005-2007, some in 2008 & 2009 - charge-offs all paid as well as a couple larger collections.  Total unpaid are $1000 total and most recent was 3/10 which was a cable bill from when we moved that I never realized until we pulled our credit this summer.  All I can easily pay at closing if needed like our LO said.

 

I have great DTI ratio, same job for 4 years, seller is paying closing costs.

 

The LO seemed confident that the only condition will be collections being paid.  My only troubles after the BK was the fact that I have 6 kids and made only 30K per year making things tight.  I got a promotion in March 2010 which more then doubled my salary.

 

Have had 100% on time payment history for over a year, all cancelled rent checks, a credit card for a year and copies of all paid insurance and electric bill for a year.  One auto loan opened in February 2011 all on time and prior to that an auto loan for 3 years with only one 30 day late that is over a year old now.

 

I've heard good stories and bad ones while searching the net.  We really need this house as we are crammed into a 3 bedroom rental and my kids are getting older and we are on top of each other.  I just can't wait 4 years for that BK to fall off.  I've tried PFD's and GW letters which have been ignored or simply told no.

 

Any, any hope of making it through UW?


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

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Senior Contributor
Posts: 3,889
Registered: ‎05-24-2011
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Re: Under contract but honestly is there any chance of approval?

[ Edited ]

veggs2000 wrote:

Pre-approved last week and offer accepted Friday.  Mid score 642 for a USDA loan.My mid is 653

 

Chapter 7 BK in 2005  me too!

 

A couple charge-offs (HSBC and two cell phone contracts broken) and medical collections from 2005-2007, some in 2008 & 2009 - charge-offs all paid as well as a couple larger collections.  Total unpaid are $1000 total and most recent was 3/10 which was a cable bill from when we moved that I never realized until we pulled our credit this summer.  All I can easily pay at closing if needed like our LO said.  I have more medical collections than you do, and a 2009 water bill that went to collections.  All collections paid.

 

I have great DTI ratio, same job for 4 years, seller is paying closing costs.

 

The LO seemed confident that the only condition will be collections being paid.  My only troubles after the BK was the fact that I have 6 kids and made only 30K per year making things tight.  I got a promotion in March 2010 which more then doubled my salary. I was working nonprofit for 13 years and in 2009 finally got a good paying job and my salary didn't double, but it went up a lot.  Which is why I had such a mess and now feel like I can do this.

 

Have had 100% on time payment history for over a year, all cancelled rent checks, a credit card for a year and copies of all paid insurance and electric bill for a year.  One auto loan opened in February 2011 all on time and prior to that an auto loan for 3 years with only one 30 day late that is over a year old now.

 

I've heard good stories and bad ones while searching the net.  We really need this house as we are crammed into a 3 bedroom rental and my kids are getting older and we are on top of each other.  I just can't wait 4 years for that BK to fall off.  I've tried PFD's and GW letters which have been ignored or simply told no.

 

Any, any hope of making it through UW?    I sure hope so because our credit profiles are very similar!!  Did you get through the automated underwriting?


 

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Regular Contributor
Posts: 172
Registered: ‎07-06-2011
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Re: Under contract but honestly is there any chance of approval?

I don't believe USDA does automated UW (though I could be wrong).  We are going to talk to the LO tomorrow and address our concerns, I have heard stories on here of people with trouble after BK still being approved so I know there is hope.

 

Fingers crossed for us both!!!!!  :smileyhappy:


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

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Senior Contributor
Posts: 3,889
Registered: ‎05-24-2011
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Re: Under contract but honestly is there any chance of approval?

Your scores have come up a TON in the last month!  My LO has said over and over "You qualify if you get your scores where we need them to be (+640)."  There's guidelines around here somewhere - 12 months clean credit I think is the ticket and the scores, and the income, and the employment history etc are compensating factors.  I know post-bk collections are considered very bad.  I'm extremely worried about that, too.  But if I passed automated underwriting, I would think you would, also.  IDK if USDA does that or not.  I think they might.

 

  I'll be watching your thread w/ bated breath to see what the Pro's think!  I'll be sending out positive energy to you until you get your house!!
 

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Regular Contributor
Posts: 172
Registered: ‎07-06-2011
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Re: Under contract but honestly is there any chance of approval?

Our LO said 640 is the magic number and we are there so that is good.  Our rent payments being on time for a year is GREAT and the fact that we have no late payments is a huge plus as well.  The troubles after BK isn't good but he was very pleased with our LOE.  He said UW should take a couple days and will be this week and then will go to USDA which will also only take a couple days.  

 

He said he doesn't like to give people false hope and feels we are in a good position although there are no gurantees.  Our mortgage payment would be nearly $200 less then rent and we would only have to bring $43 to closing but in the end he said we would probably actually get a check at closing after all is said and done.

 

We are able to call him anytime and he said he will be in touch with us a lot.  This is going to be a looooong month but thankfully with the kids starting school I have plenty to stay busy with.


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

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Regular Contributor
Posts: 172
Registered: ‎07-06-2011
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Re: Under contract but honestly is there any chance of approval?

Everything was sent to the lender just now, we should know by Monday or so.


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

Take the FICO Fitness Challenge
Established Contributor
Posts: 736
Registered: ‎08-25-2008
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Re: Under contract but honestly is there any chance of approval?

fingers crossed and positive chi your way  :smileyhappy:

New Visitor
Posts: 6
Registered: ‎08-10-2011
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Re: Under contract but honestly is there any chance of approval?

640 is the magic number for the automated approval which isn't really that automated. The lender still has to submit your file to the underwriter and they are going to pick it apart. If it's going through USDA you may have a better chance in having the UW pass it through but I gaurantee that they will come back and tell you what you need to pay off, what balance your credit cards need to be at and so forth. It really all depends on how bad your LO wants to make it happen for you. I always suggest to people that before you go house shopping that you work with a LO and get financing in place first. Nothing worse than getting a pre-approval and putting a contract on a home just for you to find out that it isn't happening and now you're out time and money.

 

Good luck with the process and I hope it works out for you guys. My credit score was 615 3 months ago and my LO made it happen for me.

Regular Contributor
Posts: 172
Registered: ‎07-06-2011
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Re: Under contract but honestly is there any chance of approval?

Thanks.

 

I picked apart my credit report and all the collections/charge-offs, etc. are 2/2009 or older except that one cable bill.  I'm just so nervous I keep going over everything again and again in my head.

 

The LO said we couldn't do anything without a signed contract?!?  I don't get it.


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

Take the FICO Fitness Challenge
Regular Contributor
Posts: 172
Registered: ‎07-06-2011
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Re: Under contract but honestly is there any chance of approval?

[ Edited ]

Ok, I am probably going to sit here and talk to myself.  :smileyhappy:  However, I found this online and we meet all qualifications EXCEPT the collections.  Will paying them off at closing be acceptable for the bolded one?

 

Credit History Applicants must have a credit history that indicates a reasonable ability and willingness to meet obligations as they become due.  A credit history reflecting any or all of the following is considered unacceptable credit history: 

 

 More than one 30-day late within the past 12 months.

  Bankruptcy or foreclosure discharged less than 36 months 

 Outstanding judgments within the past 12 months

  Two or more rent payments 30 days late within the past 3 years.

  Outstanding collection accounts with no payment arrangements

  Outstanding tax liens or delinquent federal debt with no payment arrangements 

 Accounts converted to collections in the past 12 months. 

 

Of course then this seems to say the opposite - UGH!

 

For borrowers with a credit score of 620 or higher, lenders may evaluate loans utilizing USDA’s streamlined underwriting guidelines. 

 Lender shall not be required to document adverse credit history except for those involving a delinquent federal debt or previous agency loan.

  Lender shall not be required to obtain a rental history rating 

 No action will be necessary for any derogatory items, (i.e. no letters of explanation, unpaid collection accounts not required to be paid off, etc…) The credit score of the primary wage earner should be given the most emphasis; however, credit scores of other applicants will also be included in the overall review of the loan request.  Use the middle of three (3) scores or the lower of two (2) scores for all borrowers. 


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

Take the FICO Fitness Challenge
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