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buyer messed up! but could be a good thing?

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tleventer
New Contributor

buyer messed up! but could be a good thing?

Yesterday our buyer's credit was supposed to be pulled - hopefully for the last time - by our mortgage broker (we were using the same one).  We have a contract on our place but had to wait for the buyer to up her credit score.  It was 600 in January (as compared to 525 in November).  Unfortunately it had dipped a few points yesterday due to a medical collection showing up that she claims to not have known about.  So the bottom line is that we have "no news" on going forward with the sale of our house yet (we have a contract and all prepared to purchase our dream -- an 18 acre farm but HAVE to sell this house first). 

 

In the details of the conversation, our broker (Sibcy Cline) won't deal with her at that score.  Her file was turned over to a former SC loan officer who now does non-conventional loans to see if he can make it work.  that in and of itself scares the bejeezes out of me.  BUT am I wrong to feel a little relieved in that the buyer's Dad is now GOING to be on the loan (non-occupant co-borrower) in an effort to boost the overall income/credit scores?  He can't buy it outright -- as a non-occupant owner he'd have to go conventional and thus 20% down and he doesn't have it.  This way the loan can still be FHA and they have the 3.5%. 

 

I will be downright heartbroken if this falls through and we lose this farm.  And while I know nothing is guaranteed, I do have hope.  Am I just naive?

12/09 - EQ 683, TU 696, however hubby's EQ is 599 - guess what we're working on next!
1/4/10 - EQ 700!
5/7/10 - Midline score = 712! Hubby's EQ is now 613 :-)
Message 1 of 7
6 REPLIES 6
BrianB_The_Loan_Professor
Valued Contributor

Re: buyer messed up! but could be a good thing?

Sorry to break it to you but a non occupant co borrower does not help with credit

they will always use the lowest of all borrowers middle scores

 

There may still be a  bank or two doing loans for low credit but they are very hard to find

If they do find one the non occ will help to make the file more solid from an income level so that may be a big plus

 

Good Luck Hope it all works out

Brian

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Brian B The Loan Professor
Mortgage Banker - offering FHA, VA, USDA , and Conventional mortgages in all 50 states -

If I do not respond to a follow up question please feel free to contact me directly
Message 2 of 7
Lel
Moderator Emeritus

Re: buyer messed up! but could be a good thing?

I'm sorry to hear about your home-selling problems.  But I wouldn't necessarily say that your buyer "messed up" with regard to the medical collection.  One of the services that the credit reporting agencies offer is to alert the collection agencies when someone is applying for a mortgage.  This is a signal that the home buyer probably has the money to pay off old collection accounts.  As a consequence, collections - often completely unknown to the mortgage applicants - suddenly appear on their credit reports.  This has been reported many times on these boards.
Message 3 of 7
Anonymous
Not applicable

Re: buyer messed up! but could be a good thing?

Ditto to that I had collecitons waaaay past the SOL coming out of the woodwork over the summer...   Luckily after PFD just one thorn in my credit file now..  Smiley Happy

 

Good luck with your purchase.  I had a loan fall through FHA back in November due to property not meeting qualifications.  Seller's were convinced it was my fault and basically blamed the whole mess on me, didn't believe that their property was ineligbile for FHA even when presenting them with the elevation survey I paid for. 

 

At this point in the home buying game I think most folks should wait until they are at that min score and not hope for point improvement.  I've done nothing but be buy the book with my credit since the summer and it's only reflective of about a 10-15 pt change. 

Message 4 of 7
tleventer
New Contributor

Re: buyer messed up! but could be a good thing?


@Lel wrote:
I'm sorry to hear about your home-selling problems.  But I wouldn't necessarily say that your buyer "messed up" with regard to the medical collection.  One of the services that the credit reporting agencies offer is to alert the collection agencies when someone is applying for a mortgage.  This is a signal that the home buyer probably has the money to pay off old collection accounts.  As a consequence, collections - often completely unknown to the mortgage applicants - suddenly appear on their credit reports.  This has been reported many times on these boards.

 

Even if that's the case, it's still an old debt that the owes right?  Perhaps it appearing in collections is "news" but certainly not that she owes the debt... which in this case, although I'll admit that I'm probably being foot-stomping childish, does mean she messed up.

 

The only thing I've heard since Monday is that it has gone to the new loan officer and he is working on it.  The old loan officer (and my loan officer for the farm purchase) has stated that he "really believes we should be ok on both loans."  I think it's just a matter of when.  A big part of me is less worried about the sale not going through and more concerned on how this will impact the purchase of the farm.  I'm guessing we might have to push back closing at this point and I'm not sure how that will be received by the farm seller. 

 

the waiting game of this whole thing just sucks.  told hubby that if he ever considers divorce, keep in mind that HE will be the one leaving.  I plan on never doing this again and dying on this farm. Smiley Wink

12/09 - EQ 683, TU 696, however hubby's EQ is 599 - guess what we're working on next!
1/4/10 - EQ 700!
5/7/10 - Midline score = 712! Hubby's EQ is now 613 :-)
Message 5 of 7
tleventer
New Contributor

Re: buyer messed up! but could be a good thing?


@Anonymous wrote:

At this point in the home buying game I think most folks should wait until they are at that min score and not hope for point improvement.  I've done nothing but be buy the book with my credit since the summer and it's only reflective of about a 10-15 pt change. 


Oh, I agree!  When we found out her credit was bad (525) my realtor was LIVID that her's woudl allow her to put in an offer on a place without her credit being at an acceptable level.  We've been dealing with this since early November - and honestly only because we haven't had any other interest in the house!!

12/09 - EQ 683, TU 696, however hubby's EQ is 599 - guess what we're working on next!
1/4/10 - EQ 700!
5/7/10 - Midline score = 712! Hubby's EQ is now 613 :-)
Message 6 of 7
Lel
Moderator Emeritus

Re: buyer messed up! but could be a good thing?


tleventer wrote:

@Lel wrote:
I'm sorry to hear about your home-selling problems.  But I wouldn't necessarily say that your buyer "messed up" with regard to the medical collection.  One of the services that the credit reporting agencies offer is to alert the collection agencies when someone is applying for a mortgage.  This is a signal that the home buyer probably has the money to pay off old collection accounts.  As a consequence, collections - often completely unknown to the mortgage applicants - suddenly appear on their credit reports.  This has been reported many times on these boards.

 

Even if that's the case, it's still an old debt that the owes right?  Perhaps it appearing in collections is "news" but certainly not that she owes the debt... which in this case, although I'll admit that I'm probably being foot-stomping childish, does mean she messed up.

 

The only thing I've heard since Monday is that it has gone to the new loan officer and he is working on it.  The old loan officer (and my loan officer for the farm purchase) has stated that he "really believes we should be ok on both loans."  I think it's just a matter of when.  A big part of me is less worried about the sale not going through and more concerned on how this will impact the purchase of the farm.  I'm guessing we might have to push back closing at this point and I'm not sure how that will be received by the farm seller. 

 

the waiting game of this whole thing just sucks.  told hubby that if he ever considers divorce, keep in mind that HE will be the one leaving.  I plan on never doing this again and dying on this farm. Smiley Wink


You'd be surprised.  The billing practices of some hospitals can be very confusing.  For example, there might be a facility charge - the charges for the hospital room, medications, IVs, etc - and separate physician charges, that comes on an entirely different bill.  DW and I nearly got ourselves into trouble many years ago because we were confused by all these different bills that kept showing up.  She was hospitalized for a strange illness (probably Lyme, in retrospect), and she received consults from about 6 different clinical services.  Each clinical service, plus the hospital, sent separate bills.  We couldn't keep them straight, and thought we had paid them all until we got threatening calls from the hospital saying that we still owed them money.  We had to spend 2 hours sitting down with a billing person to figure out that there were two $50 copays that we had missed.  Of course, one could argue that we messed up as well, but it wasn't because of negligence, it was because of confusion.

 

Lots of people here have been burned by unexplained or unknown collections, which is why there is a lot of discussion about debt validation on other boards.  Some people simply have no idea whether a debt is actually theirs or not.

 

I hope things work out for your buyer, and that your farm purchase goes through eventually.  I agree that the buyer's credit was borderline to begin with which always made her approval tenuous.

Message 7 of 7
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