"Account information disputed by consumer" comments keeping me from getting Mortgage

[Anonymous]

I know...I had never heard of it either.  Some people that don't have this problem don't understand the difference from open disputes that are being actively researched and the Account information disputed by consumer "notations" that the CRAs put on the account.  Most people just say they will come off in 30-45 days and it's not the case!

[JenThompson777]

I think that one or two of those notations on my CRs are b/c I did dispute and the CRAs said they verified them.  Those notations have been there since July 09.  I guess I'll try to get those removed anyways. No harm in trying.  I read that some people will call the CRAs and, depending who they get on the line, they might just erase the notations that day.  <?>  

I read today a news article that said Fannie Mae, at least, is close to a decision on possibly taking that out of the equation for approving loans - and not using these notations against people anymore.... which makes sense to me.  

[Anonymous]

The reason they count these against you is all of the people using "credit repair" services.  These companies send out disputes left and right hoping that companies will fail to respond in time and therefore the item must be removed form the CR.  That is how they work.  So, if a lender sees a CR that has a bunch of disputes, they assume this person just blanketed all itmes on the CR with disuputes.  It makes the lender wonder if any legitimate items that they should be aware of were removed due to this action, and makes the lender question the true risk of that loan.  I agree that a single disputed item should not kill a deal, but I would not loan to someone who had a bunch of disputes on their account unless they could prove identity theft, etc of some kind as an explanation. 

I doubt there is any chance we will see this totally taken out of the equation.  We might see some pressure on the CR's to more quickly remove disputes quicly once the consumer drops them, and we may see a little more room from lenders as to 1 or 2 disute remarks being OK.  But, we are unlikely to see this fully removed from the approval scenario as it is statistcily accurate way to look at things.  People with a bunch of disputes are more liely to have had a bad previous credit history, more likely to not fully disclose all debts (ones that were removed), and are probably at least slightly more likely to end up in default.

[MattH]

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@Anonymous wrote:

The reason they count these against you is all of the people using "credit repair" services.  These companies send out disputes left and right hoping that companies will fail to respond in time and therefore the item must be removed form the CR.  That is how they work.  So, if a lender sees a CR that has a bunch of disputes, they assume this person just blanketed all itmes on the CR with disuputes.  It makes the lender wonder if any legitimate items that they should be aware of were removed due to this action, and makes the lender question the true risk of that loan.  I agree that a single disputed item should not kill a deal, but I would not loan to someone who had a bunch of disputes on their account unless they could prove identity theft, etc of some kind as an explanation. 

I doubt there is any chance we will see this totally taken out of the equation.  We might see some pressure on the CR's to more quickly remove disputes quicly once the consumer drops them, and we may see a little more room from lenders as to 1 or 2 disute remarks being OK.  But, we are unlikely to see this fully removed from the approval scenario as it is a statistically accurate way to look at things.  People with a bunch of disputes are more liely to have had a bad previous credit history, more likely to not fully disclose all debts (ones that were removed), and are probably at least slightly more likely to end up in default.

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Yes, exactly so.  FICO and the internal scoring systems used by major lenders are based on statistical correlations: after removing facts that they are not allowed to use due to antidiscrimination laws, they use standard data-mining algorithms to determine which facts in a credit history do the best job of predicting the probability of default.  Complaining that such methods are "unfair" amounts to blaming the messenger: the facts are what they are.  Numerous studies in many domains (I personally am more familiar with the use of data mining in biomedical research because my job is doing such analyses for a large pharmaceutical company) have shown that statistical models frequently can predict outcomes more accurately than humans do, even humans who consider themselves to be domain experts.  There are of course some exceptional cases, people who have a valid reason to argue that their actual risk of default is lower than what would be statistically predicted from their credit history; the existence of such exceptions is the main reason why human underwriters still exist.  Of course there are also people who look like excellent risks to the statistical algorithms but an experienced human underwriter would be concerned.

[JenThompson777]

Good news for those of you who have the "Account information disputed by Consumer" statements on your credit report - AND are applying for USDA loan.

I was just approved for a home loan through USDA Gauranteed program even with those statements on my report.  The LO said these didn't come back as an error and I was automatically approved.

I'm not sure if this would be the case with FHA, but the LO said the USDA was one of the only programs that did not count those statements against you, unless it was placed on a judgement.

I have a few open collections as well, and those did not count against me either.  So, if you can - and you have these issues, I recommend going USDA. Just food for thought.

[Anonymous]

Jen, that is good news.  One word of caution, it is often not until the file is actually in front of the underwriter that these come up as issues.  Collections in particular do not matter to the LO, the UW will decide if they need to be paid adn there may be little warning on that.  Same can be true of the dispute remarks.  USDA policy or not, UW want to know about why items are disputed.  If there are a bunch on there they assume there has been some credit file manipulation and may require them removed or explained prior to approval.  The pre-approval you do through the LO is mainly a numbers crunching game with income, job history, FICO score, and debts....Not specific underwriting guidelines.  Otherwise everyone that got a pre-approval would end up with a closed deal.

[Anonymous]

How do I know if the account is being disputed or was disputed? I have one account that has the notation "Consumer disputes account information". So I am assuming it is still under dispute? This has been on my EQ report since August '09. I called EQ but they don't own my file. They said CSC owned but I cannot find a number that lets me speak to a real person. The nu,ber I do have let's me speak to a machine. Does anyone have a number where I can speak to a real person?

[Anonymous]

you have to call the credit reporting egancy (equifax/TU/Experian) and request that the dispute remarks be dropped.  IT takes awhile for htem to comply some times.

[JenThompson777]

Thanks Mickie08. I'll definitely keep that in mind.  After speaking with the LO, she says that the UW only may need me to write a letter to explain one collection I have - but I will not need to do anything with the consumer dispute notes - and that the only thing I need to do now is pick out a house and then call her when we've found one.

Doesn't that make it sound like it's too easy? Yeah... it just may be.  Okay, I'll take caution on this one until I hear from an UW.  But, I'll keep you all updated with how it goes.  If it does go through smoothly - GREAT!  (crossing fingers)

[Anonymous]

I just found out the hard way that they "account diputed by consumer" comment does hurt an approval. Moreso an FHA I think . You may get an automated approval but then the underwriter gets their hands on it and wants that statement off. Mine are past the dispute stage and it seems like once they've investigated they would remove it and just show the account as verified status as I never actually requested that statement added anyhow. It just shows up on there because in fact it was in dispute. Funny how they want you to clean up your credit report of innacurate info or anything in question regarding verifying the debt etc but when you do it kills you. My scores are finallly home buying worthy again after a sticky divorce and I have the cash to put down, it's just those pesky disputes.  I'm about to try to have them removed as they apparently don't drop off.

Does anyone know of any law that requires them to remove it if you ask?  That would be helpful to know. I don't think it's helping or hurting my score to have that on there. Personally, I work for a credit and we don't look at that. We only do conventional anyhow and don't sell our loans.  It's a bit of a different ball game than mortgage companies or FHA loans.