10-04-2012 01:38 PM - edited 10-04-2012 01:39 PM
With the goal to purchase a home, keep the unpaid collections in mind. They will most likely have importance to the prospective mortgage lendor.
Certainly, unpaid delinquent debt that is still within SOL represents continued peril of the prior creditor obtaining a judgment for its repayment, possibly leading to attachment of assets as satisfaction of any court judgment. A real concern for any new, prospective creditor, as it might affect your future risk in repayment of their loan.
Some mortgage lendors have a standard policy of requiring that any old, delinquent paid be paid as a pre-condition for their approval, regardless of SOL status.
That, of course, requires them to obtain knowledge of any old, unpaid delinquent debt. Exclusion of reported items from your credit report, such as old delinquencies, charge-offs, collections, judgments, etc., certainly removes their opportunity to become aware of unpaid debt via a simple pull of your CR, but that might not be the only source of their awareness. Affiliate sharing of information, or even a simple question in your application whether you have any old, unpaid debt, might lead to their awareness.
It's always best to go into a mortgage app process free of unpaid, delinquent debt. If it's still out there, you take your chances that it might bite you.
10-04-2012 01:39 PM
I believe there's another point on this, maybe someone can comment on this. If the loan is for over 150,000 they can pull a more detailed report that would still list some of those that were aged off.
10-04-2012 02:02 PM
Yes, none of the credit report exclusion periods in section 605(a) are absolute.
FCRA 605(c) enables a creditor to receive a full credit report, including any and all prior derogs, if they are inquring with regard to a consumer initiated request for credit or insurance that involves a principal balance of $150K or more.
However, the creditor must make a specfic request for such a full CR. I am aware of a few situations where they have made such requests, but for the most part, it is not standard practice. I would opine that the chances are very, very slim.