FHA & Unpaid Collections

[Anonymous]

I talked to a lender about getting pre-approval for an FHA loan. I told her that I had an unpaid collection for ~$4500 that was just about to fall off (last paid 2/2008). At first she didn't think this would be a problem, but after running my creit (score was 680), she indicated that I would need to enter into a payment plan with the CA, but that since it was SO CLOSE to falling off, that I shouldn't do anything and just wait, start shopping for a house. She said that she could give me a pre-approval contingent on this falling off. 

I pulled my three reports. TransUnion is saying "Estimated month and year that this item will be removed: 02/2015" (next month).  Equifax says: "Date of First Delinquency: 03/2008". Experian doesn't appear to be reporting it. 

When can I expect this to fall off my credit? Will I need to take any steps to remove it from my credit? Do you think it will realistically fall off in February or March?

The dilemma is that I must move out of my rental by March 1st, so I'm really up against a time crunch (and don't want to sign another one year lease somewhere). I do have options for moving into somewhere for a month or two, but I probably can't stretch it much past May 1st.

Thanks for any advice!

[DallasLoanGuy]

maybe ask this in the credit forum

[Peter1142]

They are legally allowed to stay on for 7 years and IIRC 110 days from DOFD... no guarantees they will fall off at exactly 7 years.

[RobertEG]

Just curious...... why is the lenfor willing to ignore an unpaid debt based only  on it becoming excluded from your credit report?

[Anonymous]

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@RobertEG wrote:

Just curious...... why is the lenfor willing to ignore an unpaid debt based only  on it becoming excluded from your credit report?

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My guess would be that although they originate the loan, they are looking to sell it as soon as possible.  Very few lenders keep the loans themselves.

[DrMac210]

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@Anonymous wrote:

I talked to a lender about getting pre-approval for an FHA loan. I told her that I had an unpaid collection for ~$4500 that was just about to fall off (last paid 2/2008). At first she didn't think this would be a problem, but after running my creit (score was 680), she indicated that I would need to enter into a payment plan with the CA, but that since it was SO CLOSE to falling off, that I shouldn't do anything and just wait, start shopping for a house. She said that she could give me a pre-approval contingent on this falling off. 

I pulled my three reports. TransUnion is saying "Estimated month and year that this item will be removed: 02/2015" (next month).  Equifax says: "Date of First Delinquency: 03/2008". Experian doesn't appear to be reporting it. 

When can I expect this to fall off my credit? Will I need to take any steps to remove it from my credit? Do you think it will realistically fall off in February or March?

The dilemma is that I must move out of my rental by March 1st, so I'm really up against a time crunch (and don't want to sign another one year lease somewhere). I do have options for moving into somewhere for a month or two, but I probably can't stretch it much past May 1st.

Thanks for any advice!

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Based on my experience from last year with MULIPLE, MUTIPLE baddies falling off I would expect the following:

EXP tends to fall off first, usually 1 month prior to the others.

EQ usually falls off on the first of the month, in your case I would say probably 2/1

TU typically fell off for me last and on the exact date of the DOFD, minus 7 years.  So if it says it will fall off 2/15, but the DOFD was on 3/10/08...... it won't fall off until 2/10/15.

Just my .02 from what happened to me last year.

[Momof5]

Do an online dispute and dispute it as obsolete.  This will usually result in an early deletion.