gray0218
New Member
gray0218
Posts: 5
Registered: ‎04-24-2012
Declined at underwriting

‎04-24-2012 07:08 PM

I recently was turned down for a home loan at final underwriting. I was prequalified and told the loan officer I had alot of medical collections on my credit report. He pulled my report and said they weren't an issue. I started looking for a house and made an offer that became a n accepted contract. I had a home inspection and radon inspection done out of pocket and started packing when the loan officer called and told me that because of the medical collections they couldn't help me and to try again in six months payments on the medical. I now have less than a month til closing and no financing. Anyone know if there's anything I can do?
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Senior Contributor
Booner72
Posts: 3,847
Registered: ‎05-24-2011
Re: Declined at underwriting

‎04-24-2012 07:15 PM

Are they paid?

How Many?

When was the most recent collection put on your reports?

What are your scores?

How much are they in total?  A new FHA law was going to come out April 1 that said if you have collections that total 1000.00 or more, they all need paid, but I believe that was delayed for a few more months.  It's possible that the lender you used put that into practice as their policy.

Who was your lender?

 

Please start researching PFD (Pay for delete) and GW Deletions (Goodwill deletions) and even HIPAA, though you don't have time to do that if you need a loan in a month.


 

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
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gray0218
New Member
gray0218
Posts: 5
Registered: ‎04-24-2012
Re: Declined at underwriting
[ Edited ]

‎04-24-2012 07:21 PM - edited ‎04-24-2012 07:25 PM

They are not paid. My middle score is 637 and it is around 17000 total with almost all being 3 to 6 years old. My problem is that the lender knew about them when I applied and told me it wouldn't be an issue because they were medical. I don't understand why I'm finding out it is an issue when I am supposed to close. It was for a VA loan with first step mortgage.
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Senior Contributor
Booner72
Posts: 3,847
Registered: ‎05-24-2011
Re: Declined at underwriting
[ Edited ]

‎04-24-2012 07:31 PM - edited ‎04-24-2012 07:32 PM

I'm so sorry.  I know exactly how you feel.  I lost a house AFTER closing...after I had the keys!  So I know your pain.

 

However, 17K is a ton of money and you are, as I'm sure you know, at risk of being sued by any of those collection agencies for the collections that are not past the SOL in your state - (you should probably research that). 

 

I think you will either have to PFD them off or wait until the CRTP and the SOL passes and they are no longer on your reports.


Yes, I absolutely agree that your LO should have ran this by someone before you got this far into the process.

 

ETA:  but don't do what I did!  Don't just let your credit go to pot bc you can't get a house right now.  Continue to take good care of it.

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
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Frequent Contributor
Familywantsahouse
Posts: 291
Registered: ‎02-25-2012
Re: Declined at underwriting

‎04-25-2012 03:02 AM

I'm so sorry. depending on their age, I would frantically be offering a "pay for delete" scenario for a percentage of what's owed on them.

 

I've gotten 4 medical baddies deleted since 2/24, all for a percentage (25-60) of what was owed.

 

They were all older, though.

2/24 (Lender Pull) EQ 613, TU 553, EX 589
April EQ 633, My Fico TU 638, EX ??
Current EQ 643, TU 652, EX 633 (lender pull 5/11)
Goal (we made it!!)- Over 640 middle by 5/15
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Frequent Contributor
cassembler
Posts: 470
Registered: ‎02-07-2011
Re: Declined at underwriting

‎04-25-2012 06:48 PM

Booner72 wrote:

I'm so sorry.  I know exactly how you feel.  I lost a house AFTER closing...after I had the keys!  So I know your pain.

 

However, 17K is a ton of money and you are, as I'm sure you know, at risk of being sued by any of those collection agencies for the collections that are not past the SOL in your state - (you should probably research that). 

 

I think you will either have to PFD them off or wait until the CRTP and the SOL passes and they are no longer on your reports.


Yes, I absolutely agree that your LO should have ran this by someone before you got this far into the process.

 

ETA:  but don't do what I did!  Don't just let your credit go to pot bc you can't get a house right now.  Continue to take good care of it.

+1, all well-said.

"Credit is purely a cash flow tool. Thinking of credit as extra money you didn't have before makes it an EXPENSIVE cash flow tool."
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Valued Contributor
drkaje
Posts: 2,900
Registered: ‎07-25-2008
Re: Declined at underwriting

‎04-25-2012 06:56 PM

Like Booner said: Just keep working on rebuilding and repair.

 

I'm really surprised at the LO, though. $17K in collections is just a lot. I really wouldn't have applied under those circumstances or believed him/her.

Starting Score: 675
Current Score: EX 753 FICO, EQ 750 FICO
Goal Score: 776 FICO

Take the FICO Fitness Challenge
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gray0218
New Member
gray0218
Posts: 5
Registered: ‎04-24-2012
Re: Declined at underwriting

‎04-26-2012 12:12 PM

I was working with the lender for several months before I even applied for a loan. I was told that the medical collections didn't matter and I just needed to bring my credit score up. I did everything they told me to do and brought it up. I am currently trying to secure financing through vamortgagecenter.com and they told me as long as the medical collections are under 20k I should be ok. I hope so since I am under contract and have already paid for a home inspection and radon inspection. We will see.......
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Established Member
brownplayboy310
Posts: 43
Registered: ‎02-27-2012
Re: Declined at underwriting

‎04-26-2012 12:27 PM

Booner72, how did you get denied AFTER closing?  That's freaking insane!  Now I'm getting really scared, I'm in UW and so far I haven't heard anything NEW that bad.  I'm just curious to see if it's something that might happen to me.  Thanks!

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Frequent Contributor
chan85
Posts: 461
Registered: ‎03-13-2011
Re: Declined at underwriting

‎04-26-2012 03:46 PM

brownplayboy310 wrote:

Booner72, how did you get denied AFTER closing?  That's freaking insane!  Now I'm getting really scared, I'm in UW and so far I haven't heard anything NEW that bad.  I'm just curious to see if it's something that might happen to me.  Thanks!


yes please answer that!? i almost choked when i read it!


WM TransUnion- 686 (4/2013) Credit Sesame Experian- 705 (4/2013) Credit Karma TransUnion- 648 (4/2013) Privacy Matters Experian- 691 (5/2013)
Amex Zync/UNICORN- NPSL/Capital One Rewards Mastercard -$4,000/Capital One Rewards Visa- $3,000/Wal-Mart Discover- $4,200/Bill Me Later- $2,200/JCP- $3,800/Discover IT- $500/Care Credit -$500/Old Navy- $800/New York & Company - $500/Orchard Bank -$300
GOALS: Trim the fat, pay down, and no apps until at least 12/20/13 Last HP: 11/23/2012
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