Enhanced Recovery stopping my mortgage

Anonymous · ‎04-06-2015

I was pre-approved for a mortgage with a mid score of exactly 640 for KHC loan (Kentucky housing corporation) in early Feb after spending months working on rebuilding my credit after a divorce. Closing date was set, underwriting pulled my credit and I had item with the word "dispute," so took a little over a week to get the disputes removed. Lowered my score, no longer pre-approved. My only hope now at the advice of my LO, is to get the 2 paid collections off my report. One of them I had no problem getting a letter stating they will remove it. It's Enhanced Recovery absolutely will not do it. Help! This is only thing stopping me. Should I contact a local attorney for help? This needs to happen fast before I lose the house

RobertEG · ‎04-06-2015

There is no legal basis for compelling deletion of accurate reporting of a collection.

The CRA reporting policy instructs creditors and debt collectors not to delete their prior reporting based on payment of a debt, so their refusal to delete is supported by their credit reporting agreements with the CRAs.

Best bet is to obtain the name of an upper management official who has authority to grant exceptions to their non-deletion polices passed down to their employees.

My question is if the collection was prevsiously known to your loan officer and yet they grranted pre-approval, what has now changed that resutls in their denial unless the collection is deleted? Perhaps a call to an upper management official at your mortgage lendor would be in order, as I see no substantive change since the disute flag has been removed. It seems totally arbitrary at this point.......

Anonymous · ‎04-06-2015

As a first time homebuyer, I had to get my mid score to 640. Once it's at 640, it was automatically approved. The dispute didn't show until they pulled credit before closing. When the dispute was removed and lowered my score, the next thing is they ran it through a simulator, if I can get the 2 collections off, my score will jump back over 640. So you are telling me I have no hope? How would I contact someone at enhanced recovery in upper management? I talked to a supervisor and they all kept telling me the same thing.

Anonymous · ‎04-06-2015

I would find a different lender. These kind of games do not bode well for actually getting the loan. Pre - approval for a mortgage should mean "we will give you a loan within the next X days." It seems your LO took it to mean, "I'd like to involve you in confusing games."

Why did you need to remove the dispute? I've heard this before and have always been confused on why lenders would require a legitimate and closed dispute to be removed.

gdale6 · ‎04-06-2015

@Anonymous wrote:
I would find a different lender. These kind of games do not bode well for actually getting the loan. Pre - approval for a mortgage should mean "we will give you a loan within the next X days." It seems your LO took it to mean, "I'd like to involve you in confusing games."

Why did you need to remove the dispute? I've heard this before and have always been confused on why lenders would require a legitimate and closed dispute to be removed.

Its because certain aspects of the TL are not included in FIco scoring when its marked with a dispute comment so the comments have to be removed so the whole TL is included in the Fico metrics. All mortgage lenders will require this its not illegal nor something out of the oridinary, they want a true Fico on you.

Anonymous · ‎04-06-2015

i learned this the hard way, a dispute has to be removed because when something is in dispute status, fico doesn't factor that in your score while in dispute. So, you have a false score. I have thought about switching lenders, but I am with a reputable one.

Anonymous · ‎04-06-2015

Gdale, doesn't that only apply to open disputes? If a dispute is resolved, is it still excluded from scoring? That's where my confusion is.

gdale6 · ‎04-06-2015

@Anonymous wrote:
Gdale, doesn't that only apply to open disputes? If a dispute is resolved, is it still excluded from scoring? That's where my confusion is.

Any comments of dispute will keep it from being totally scored, this is the info I have on it.

Anonymous · ‎04-06-2015

@gdale6 wrote:
@Anonymous wrote:
Gdale, doesn't that only apply to open disputes? If a dispute is resolved, is it still excluded from scoring? That's where my confusion is.
Any comments of dispute will keep it from being totally scored, this is the info I have on it.

Very interesting! I'll have to ask the LO I'm working with the next time we have a check-in. He had suggested items to dispute, as the reporting was obviously wrong (an old car loan that reported 30 days late a month after it was PIF, for example).

Anonymous · ‎04-06-2015

I've been doing some more research, apparently if I pay the OC, (original creditor), by law, they will have to remove it. Sprint will not talk to me because I forgot my pin number, and the security questions were something my ex-husband set up. It is going to be a pain, but I have to stop at a sprint store tomorrow, show an ID to get a new pin. I'm not even with Sprint anymore, I have been with Verizon for 3 years. I'm not sure if anyone knows anything about this method, but I just read a very lengthy article and all of the laws from FRCA.