Was denied FHA. Hard to believe ?

[Anonymous]

Hi All,

I talked to a loan officer today about possibly securing an FHA loan in the future.  My husband has 0 credit card debt, good DTI ratio.  His private student loan with US bank is in collections for $66,000 which we are currently paying on monthly.

The LO basically said that even if everything else is perfect, there is no way we can get a home loan with the private student loan in collections.  We would need to wait until it's fully paid off and out of collections. I spoke with US bank and there's nothing they can do. No rehab, nothing.  Just a settlement of $40,000 which is no way near reachable. 

It will take us 10 years at least to pay this off.  I flat out asked the LO if home ownership was out of the question for the next 10 years for us and his response was "I think so". 

How can this be?  I've noticed others on these boards being approved for mortages with Bankruptcy, repo...everything under the sun? 

Should I just resign to the fact that we will have to rent the next 10 years?

[Anonymous]

Talk to a different LO. I just got an FHA loan with an $18K private student loan collection that I'm not paying on at all (it dropped off my report a month after closing due to its age though). They just added 5% of the balance to my DTI.

[Anonymous]

Thanks Greg. Is there a certain company you can recommend ?

[VALoanMaster]

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@Anonymous wrote:

Hi All,

I talked to a loan officer today about possibly securing an FHA loan in the future.  My husband has 0 credit card debt, good DTI ratio.  His private student loan with US bank is in collections for $66,000 which we are currently paying on monthly.

The LO basically said that even if everything else is perfect, there is no way we can get a home loan with the private student loan in collections.  We would need to wait until it's fully paid off and out of collections. I spoke with US bank and there's nothing they can do. No rehab, nothing.  Just a settlement of $40,000 which is no way near reachable. 

It will take us 10 years at least to pay this off.  I flat out asked the LO if home ownership was out of the question for the next 10 years for us and his response was "I think so". 

How can this be?  I've noticed others on these boards being approved for mortages with Bankruptcy, repo...everything under the sun? 

Should I just resign to the fact that we will have to rent the next 10 years?

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Hi Goal46,

The key is the fact that it's a private student loan. If this were a government backed student loan you would most likely be in the CAIVRS system which would pretty much disqualify you from an FHA loan. 

As long as you can document that you're in a repayment plan & you've made your payments on time for 6-12 months I should be able to get you approved.

[Anonymous]

Thank you for the reply.  Is there a way that I can contact you?

[VALoanMaster]

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@Anonymous wrote:

Thank you for the reply.  Is there a way that I can contact you?

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I sent you a private message.

[DallasLoanGuy]

lender is wrong. federal debt kills the deal. not private sl

[Imperfectfuture]

This thread caused me to sign up on fafsa (think that is what it's called), showed my student loans. Not coded for disability, they actually accepted the bankruptcy (though one of the loans had bad date on it).

Edit:actually fsa id on National Ed site.  Kinda get behind the 8 ball on what shows up with caivrs.

[Caldric]

It was strange when I talked to a loan officer recently and I knew, I knew more that she did. Didn't make me very confident in the process and they don't seem to listen when you try to explain things that are commonly known around here. Either don't pay attention our they are just incompetent not sure if not both.