auto co and mortgage approval

[treschic]

i'm sure this question has been answered before, but i can't find it when perform a search. i'm anticipating becoming qualified for naca in december. i've already been to my meetings with my counselor, and am waiting for the interest rates to go down, as well as remove 2 items from my credit report- i was told these had to be cleared before i am qualified.. I have a car that i co-signed on for a friend. i found out after the fact that the friend defaulted on the loan, and had the car repossessed. the original 30 day late occurred in dec '06, and the car was reposessed in jun '07. well, they still have a balance left even after it was sold at auction, and is being reported as a c/o account. i've gone back and forth with the company, and have written the bbb, and even contacted an attorney to no avail. my attourney even wrote them a letter requesting a detailed account of the charges. long story short, this is one of the only items that can hold up my being approved, and i'd like to just pay it, even if its just a settlement. i know that most underwriters want clean history for 1 year. so, anyways, if i were to pay it off in october, which date do most mortgages go by? the original dec '06 date of delinquincy, the jun '07 date of repossession, or the sept '08 date which would be the last date of c/o status?

[Anonymous]

Probably the date it is paid off.  That will show as the date of last activity.  I may be wrong on this though.

[Anonymous]

The always go by the original date.

[Anonymous]

I stand corrected.  I thought for the 12 month rule it was date of last activity

[Anonymous]

I had an old AT&t bill from 2006 that I had paid off Nov 2007. I close on my house next week. Last activity will most likely hurt your credit scores, but they look at the original date when looking at the 12-24 month rule. I did not even need a letter of explanation for this account. Good luck with naca, I had to ditch them, too slow, and loan officer has too many people to focus on. When they finally approved me, I found a house that was alot more than what they were giving at a better rate, 5.75% this is better than where they are right now. If they would had been faster in the appoval process, I probably could have gotten a rate when it was 5%.  But anyway good luck with that, hope your experience is better than mine.