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Established Contributor
Posts: 1,837
Registered: ‎08-20-2012
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Worried and Concerned

Here is the situation.

 

I know someone whom is looking to obtain a mortgage within the next 2-4 months. The person filed for bk in 2005 but the bk is not listed on any cra's. I know from personal experience that the 1003 will ask if you filed bk in the past and they always check bk filings on everyone. She will answer yes of course to the bk. Now the question is how will it look that she filed bk in the 2005 but it isnt on any of the cra's?

 

Also the same person has a irs judgement on TU  but it was removed from EX and EQ. How I dont know but it isnt on the ex or eq report. There is a monthly repayment plan for the IRS which has been paid faithfully for the last 2 years that I was told. Now the same question. How will it look when the person go to apply for a mortgage and the IRS is only on TU but not the other two?

 

Will any of this have a negative effect on the person?

 

Thanks In Advance

Established Contributor
Posts: 1,837
Registered: ‎08-20-2012
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Re: Worried and Concerned

ANYBODY?

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Worried and Concerned

It shouldn't. Listen, I filed BK in 2003 & 2005. The BK 13 from 2005 was deleted in Oct 2012 and the BK from 2003 is still on my reports because it was a Chapter 7. I just closed on a FHA loan on 2/6/13. I had to provide information about both BKs even though only the Chap 7 is still on my reports. They wanted an letter of explanation for the Chap 13 that is NOT on my credit reports. They also wanted to see the filling papers that had the full list of included creditors in the Chapter 13 as well as the discharge letter for the Chapter 13. They wanted more information about the BK 13 that wasn't on my reports than for the BK 7 that is still on my reports and I found that odd.

So, even though the BK is not on their credit reports, I encourage them to be up front about the BK. Being that I am now a homeowner, it doesn't mean instant denial. I think it would look worse if the BK wasn't disclosed up front and they found it in the public records later.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Established Contributor
Posts: 1,837
Registered: ‎08-20-2012
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Re: Worried and Concerned

Ok. The person has very reason to list in on the 1003 but was just concerned as to why is not showing on any of the reports considering the 10 removal mark hasnt been exhausted. I believe the person is worried that the lender will look upon the borrower as if the person has something to hide even though that it was listed on the 1003 about he IRS and BK but not on the credit reports.

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Worried and Concerned

As far as the judgement (is it a judgement or a lien?) on their credit report, I'm not sure how that will go over with the underwriters. It is good that this person has been on a payment plan as typically they want to see at least 6-12 months of on time payments. I think it can go either way with respect to the judgement. It would have been better if this person setup a payment plan with the IRS before they started collection proceedings and posted a judgement on that person's credit report. I am also on a payment plan with the IRS but I will have it paid off in a couple of months and there was no judgement or lien placed on my credit reports. I also disclosed the IRS payment plan to my LO and it was not an issue. I didn't need to write any LOEs or provide any documentation. YMMV as this person has a judgement on their credit report that is unpaid due to the repayment plan.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Worried and Concerned

So are you saying the BK was removed on a couple of bureaus before it was due to fall off? What type of BK was filed in 2005?
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Established Contributor
Posts: 1,837
Registered: ‎08-20-2012
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Re: Worried and Concerned

Im not sure if the IRS is a judgement or a lien. It is listed as a public record on the credit report. Sorry that I misspoke.

Established Contributor
Posts: 1,837
Registered: ‎08-20-2012
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Re: Worried and Concerned

Yes the BK  was removed before it was suppose to fall off of EQ and EX but is still on TU. The bk was filed in 2005 and it was a chapter 7.

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Worried and Concerned

Interesting. Yes that is early. Are you sure it wasn't a 13 that was converted to a 7? For a Chapter 7, it should have reported through 2015. I'm not sure how that is going to play out. Did this person contact a legal agency to get the Chapter 7 removed early?

If you're not sure, it is probably an unpaid tax lien on their credit report. Some lenders require 6 months of on time payments, others require 12 months. And then there may be some that don't accept it at all.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Smiley Happy Last App: 4/5/13 Gardening until July 2014
Established Contributor
Posts: 1,837
Registered: ‎08-20-2012
0

Re: Worried and Concerned

Yes the person assured me it was a 7.

 

Yes there has been a repayment plan in place for the last 2 years without a single missed payment.

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