topic Re: A Question?? in Mortgage Loans

A Question??

Anonymous — Thu, 28 Feb 2013 19:22:10 GMT

This is puzzling to me...how is it if you struggle through a hard time and try to pay your credit card bills even though late and always pay your mortgage on time , you are penalized in the way of a lower credit score for a longer period of time that the person that files BK or goes through a foreclosure???

These quotes are copied directly from a mortgage companies site and are current statements from them!

96.5% financing 3 years after Foreclosure on FHA loans.

96.5% financing with credit collections

96.5% financing if you are in a Chapter 13 Bankruptcy for the past year and paying on time with a minimum credit score of 640 (how do you get a 640 score???)

96.5% Financing on FHA 2 years after chapter 7 bankruptcy with credit score above 640.

So what I get out of this is rather then wait for those pesky 7 yr long 30 day late payments to drop off your CR just file a BK walk away and Avoid the hassle?..whats going on in this country anyway

Sorry to the pros here but your industry seems like it is rapidly approaching Used Car Salesman status

Re: A Question??

tooleman694 — Thu, 28 Feb 2013 19:30:59 GMT

30 day lates have pretty much zero impact on your score after 2 years.

Re: A Question??

Anonymous — Thu, 28 Feb 2013 19:36:13 GMT

I agree! I struggle to make sure my bills are paid on time. Got into some trouble with my mortgage due to a cutback in my hours, and low and behold, I can't get ANY decent credit from anyone. I work hard to get my bills paid and when I was behind, I made all the right arrangements to get caught up and stay caught up. Yet, we get kicked in the backside every time we turn around. Either denials or high interest rates...

A relative of mine walked away from TWO mortgages, the latest was 4 years ago... and yet, he got another mortgage this year! How does that happen?? I know what people are gonna say... it was 4 years ago, so it's not "relevant" because most banks look at the last 24 months.... but seriously! There is something wrong with that!

Why can't creditors look at my report, see that yes I got into some trouble, but I fixed it and have been really good for the last 12 months... so aggravating...

Re: A Question??

DallasLoanGuy — Thu, 28 Feb 2013 19:36:52 GMT

i've closed deals qith 30 days lates less than 3 months old.

you arent comparing apples to apples

Re: A Question??

Anonymous — Thu, 28 Feb 2013 20:06:51 GMT

I wish? Have about 5 of them left, (30 Days +) one collection that is timed out on SOL and should drop off this summer, $0 debt $0 house payment,own my home outright, no BK ever no foreclosures no late mortgage payment is 35 years and I have a whopping 590 FICO sooo go figure am now fighting to try a get a mortgage with a 50% downpayment ($100,000 cash down ) so something is not aligned here

Re: A Question??

Anonymous — Thu, 28 Feb 2013 20:22:39 GMT

Here is the mentality we seem to be dealing with, I found this on another Mortgage/credit advise site, So who knows is this right or wrong?

"Without the bankruptcy, late and missed payments will mark you a credit risk. Very few lenders will extend you credit. And those that do will offer even worse terms than if you filed bankruptcy."

Re: A Question??

Anonymous — Thu, 28 Feb 2013 20:24:24 GMT

While things arent perfect and they never will be I know you can improve your scores. I have seen it done and there is plenty of information on these boards to assist you.

Comparing Bk and foreclosure is not a comparison for the simple reason their scores would still have to qualify. So using your situation even if you had a BK or Foreclosure you would still not qualify since your scores would hold you back.

Re: A Question??

tooleman694 — Thu, 28 Feb 2013 20:57:32 GMT

Sounds like you have a thin file, how many CC do you have.

Remember having zero debt isnt gonna help your credit scores. You are scored on how you handle the debt you have. If you have no debt you will score bad.

Re: A Question??

Anonymous — Thu, 28 Feb 2013 21:41:14 GMT

You are correct about that, I have NO credit cards, have not had any in TEN years $0 debt period and not interested in any credit cards at all, and I pay cash for my cars also, so guess will just live with 590 I guess, at least they never foreclosed on me LOL

Re: A Question??

tooleman694 — Thu, 28 Feb 2013 21:47:27 GMT

Time to get some credit cards and increase that score, use other peoples money for your day to day expenses.

Re: A Question??

Wonderyears — Thu, 28 Feb 2013 23:18:05 GMT

I hadn't had a credit card in 8 years, began paying cash for everything including cars, but I was renting. Unlike you, I needed a home of my own. Mostly a result of my delinquent credit falling off my reports, my scores were mid-high sixes (were in mid 5's). As soon as I opened 3 revolving tradelines, my scores increased to mid-upper 700's within 3 responsible months of usage. I only use them for credit optimization, nothing more. Now I'm waiting on a home to be built.

Re: A Question??

Anonymous — Thu, 28 Feb 2013 23:33:53 GMT

Your post couldn't be further from the truth. While you CAN get approved under those terms, most people do not attain it and the government is cracking down on banks that advertise mortgage loans to those 3 years from a foreclosure just because FHA rules state that they can obtain a new mortgage.

I filed BK twice and had a foreclosure and my life has been nothing but a nightmare for 10 years. I didn't hit 640 until late 2011. Finally closed on our home this month.

After bankruptcy, you need to be a model citizen. Any late payments or collections look very bad to lenders...worse than for someone without a BK.

You are right, how do you get to a 640 with all of that? Most people don't, plain and simple. It is a great example of a dangling carrot. Folks that filed BK or had a foreclosure have not been living the good life. They paid their dues. You can try BK if you like but you will regret it.

Late pays and collections can be a sign of trouble to lenders. They want to see the problem corrected before they lend you more money. It is as simple as that.

Re: A Question??

Anonymous — Thu, 28 Feb 2013 23:59:35 GMT

More thoughts:

You have to get credit to make credit. No credit equals low credit score. Something needs to be open and active at all times to rebuild and maintain a good credit score. Late pays are the worst thing you could do to your credit besides BK or foreclosure. Even if it is just the $25 min monthly payment, pay that rather than be late on a credit card. Many people do not realize this and assume it is no big deal. It is a big deal for the next 12-24 months at the least.

Post BK I have never been late on anything...100% on time payments. I even had a auto loan that had no grace period. You had 24 hours to pay it and if you were late by 1 HOUR, it went on your credit report. Did I chance sending my payment through regular mail? Hell no! That auto loan was put on autopay and always cleared on the 15th for 4 years until I traded it in. Even though I am in with Acura Financial now and they have a grace period, I have my car lease setup on autopay. All my credit cards are paid days before the due date...never on the due date unless it is setup on autopay days in advance.

After a BK or foreclosure, credit isn't just extended to you because you hit some sort of magical anniversary. This is a big misconception. You have to build your credit back up which takes years not months.

I started with a subprime auto loan and an unsecured Orchard Bank card with a $300 limit back in 2009. I wasn't approved for another card until 2012. I now have $7100 in credit limit but it didn't happen overnight. I waited 5 years and paid cash only during that time after getting denied so many times. I couldn't obtain the apartment I wanted because they had no BK policies so I ended up living under crummy private landlords and one of them assaulted me for failing to pick up a few weeds in the backyard. I barely got approved for a Chase Freedom last month with a score in the low 700's because of the 9.5 year old BK 7.

People who have never filed BK think it is easy...just wipe the debt away and start over. No way! That couldn't be further from the truth. I would take a few late pays any day and flip it to an 800!

Re: A Question??

Anonymous — Fri, 01 Mar 2013 00:08:48 GMT