Does age stop those items from representing increased risk of default? Someone linked an article (on another forum) and the author essentially wrote scores are supposed to estimate our risk of going 90 days late within 2 years. If he's right; then scores are only a small part of the equation on bigger loans.
I do think being past SOL at least means they don't have to worry about judgments or liens. It might be a case where shopping around for another company makes sense.
Stinks that there's no way to have access to underwriters, and knowing what's a definite no-go without taking hard pulls. I realize a lot of that stuff is proprietary and would make the mortgage process too easy for consumers. In the same vein, it would save a lot of trouble and time.
One thing to remember is that mortgage underwriters are in a league of their own and they couldn't care less about SOL. They can be nit picky and go back as far as your credit report goes into looking into them, but generally they look at the last 2 years worth of collections/charge offs. Anything in the last 2 years indicates a lack of responsibility in paying back your debt, which in their minds translates into you being irresponsible with a mortgage. Unless of course you have one from a previous mortgage, which is a big problem especially if it's in the last 3 years (that's self explanatory through I think) Medical collections don't matter unless they are a high amount (like $3,000 or more)
The biggest cause of cocern is if you have any account with a "dispute" status, regardless of its age. You usually have to get them removed before an underwriter will accept the loan. FHA loans will allow up to 1 dispute. I hope that helps you understand?
We just closed Friday with one outstanding 6.5 year old charge off.
Tipofthespork wrote: If it helps any I'm trying to get a VA loan. I know with
VA you need "12 months clean reporting". This is reporting but was charge off 5 years ago.
I assumed that the lender would say it has to be taken care of.
You may want to check with other VA lenders. VA regulations have been rapidly evolving. For example, as of last October 2011 VA Buyers couldn't pay for Section 1 termite repairs. Now VA Buyers can pay for closing costs not to exceed 1% of the purchase price (including Allowables and Nonallowables - they just can't pay for the termite inspection itself).
If it turns out you absolutely must clear the debt, regardless whether it has ballooned from $3,000 to $8,000, the lender will likely settle for pennies on the $3,000 sum since it is past the SOL and they can't legally collect any of it. Try for a PFD (pay for delete). Make sure in contacting them that you don't do anything to reaffirm the debt or it will start the SOL all over again. I've read there is a sample letter here in the forums, so make sure you find and use that one to protect yourself.