topic Re: could really use some advice in Mortgage Loans

could really use some advice

Anonymous — Tue, 10 Oct 2017 14:05:28 GMT

I'm trying to qualify for an FHA mortgage or even a subprime mortgage with a higher interest rate, and my timeframe is within six months if possible. Here are my particulars: I have five credit cards with a total limit of $3,550 and my current balance is about $3,200 -- so high utilization. I have two collections (a $51 from an online retailer and a $400 from a utility). I have a 30-day late payment from about a year ago on one of my credit cards. My current middle FICO mortgage scores is 516. I've tried to negotiate pay-to-deletes with the collections, but no luck. I've asked the credit card company for a goodwill on the 30-day late, but haven't heard back. I'm trying to pay down the card balances. What are the realistic chances of being able to get a mortgage in six months' time and what must be done to get there?

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 14:23:55 GMT

Why do you want a mortgage, exactly? If you're having problems with $3200 in debt, do you think you'll be able to manage the many financial emergencies that homeownership comes with?

I'd say work on your budget first and live by it strictly for 2 years, then consider a mortgage you can afford once you also consider the many surprise costs of homeownership.

You CAN get your credit score up in a year, but credit score alone won't tell you what you can actually afford comfortably. If you pay a subprime interest rate, it's even worse.

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 14:33:12 GMT

Thanks. I need a mortgage because we live in a popular, fast growing area where rent is roughly twice what a house payment would be and I have an opportunity to buy the home we're currently renting for a good price. I'm not having trouble with 3200 in debt. I can pay that. My income is roughly 70k a year. Simply looking for advice on what's possible, not criticism or a lecture. Plus, I previously owned a home (sold three years ago) so I'm aware of the "surprises" of home ownership.

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 14:32:39 GMT

I'd suggest doing that first -- pay your debts down using the AZEO Method (http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/The-AZEO-Method/td-p/5058287) and see what happens to your mortgage FICO scores. Then once your profile is as clean as possible just from payoffs, post your mortgage FICO scores here so we can give you a better handle of what to do next.

I had to write over 100 emails, letters (USPS) and even faxes to get ONE of my credit card companies to goodwill my lates to "never late" over a period of almost a year. Goodwill takes a lot of time and effort and Googling the names of bank execs and VPs. Don't assume one request over the phone will make a difference.

PFD also can take a long time. I have one collection (new, 2017) that I have been going back and forth on for over 6 months getting a PFD in writing. They will do it, I just need it in writing properly. It takes time.

My scores were <550 in March of this year, as of today my EX is 699 and I forecast 750 in 6 months. Lots of work. Lots.

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 14:44:21 GMT

I should add we'll be putting a down payment of about 10 percent

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 14:48:32 GMT

Nice! 10% will help getting the loan.

It's important to also lock down any credit apping right now. Don't apply for anything, not even a CLI request. Getting your utilization down to AZEO is going to have an effect on your scores. While you're prepping that, you need to spend some time on Google and look for each creditor/collection agency and find someone who has success with goodwill or PFD and then attack it all.

For me, I had a ridiculous $71 collection and had to call and talk to a senior manager at the agency to get them to send me a letter confirming PFD -- I think it took around 15 phone calls over 30 days to find someone who was willing to put it in writing. Over $71. My call log says I spent over 3 hours with them on the phone -- they probably LOST money just talking to me and saying "no" until I finally got someone willing to spend $1 on writing me a letter confirming PFD!

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 14:54:23 GMT

Great advice, thanks! Looks like my new partime job is going to be working on those PFDs. Glad you've had success in getting yours resolved. Gives me some hope for my own case.

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 14:59:19 GMT

It's called the "saturation method" -- I bet if you type saturation into the search bar here you'll find some good stories.

My oldest still open credit card is 62 months old. It had 120 day lates on it, and not just one or two. Most recent late was May 2015.

I created a spreadsheet just for that card and then spent probably 20 hours on Google and Bing looking up the name of EVERY VP, CxO, etc. Even found the bank owner's personal email address! Then I wrote letters by mail and randomly picked possible email addresses using first name and last name combinations and saturated it once every two weeks. For months. Since the card wasn't charged off and I paid it in full over a year earlier, I figured why not try?

Finally the bank's CFO called me on a weekend from his personal cell phone and we talked for 10 minutes and he said he would remove all lates within 45-60 days. About a month and a half later, card was "always paid on time" which was HUGE since those negatives wouldn't fall off until 2022.

Yes, it was tiring. Yes, it was exhausting just looking for names and then writing letters and putting a stamp on it and mailing them. But it was REALLY worth it.

Saturation can work if you have the dedication, and in some case the patience!

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 15:02:50 GMT

Wow, that's incredible. I've been somewhat tempted by those services like Lexington Law that promise to clean up credit issues for a fee. I've seen both good and terrible reviews for them on these boards. Any thoughts on using a service like that?

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 15:19:30 GMT

I'm not a fan for paying someone else to do what I can do myself. Plus I've also read some crazy horror stories about credit repair companies that sent disputes that locked a derogatory in forever, or got a lawsuit filed because of it. Not for me.

I generally don't dispute something unless I know it's reporting incorrectly. I also don't write goodwill letters unless I feel like I'm a good candidate for goodwill. I never did a PFD unless I had the money to pay it immediately.

I had one collection that just wouldn't PFD but it was within SOL and for a high enough balance from a JDB that has lawsuits filed against many others in my jurisdiction. It was due to fall off in 2019 so I just paid it in full after months of attempting PFD. After I paid it in full I saturated the JDB with more emails, letters and faxes than a normal human could manage asking them to remove the account. After probably 150 contact attempts to every single person up and down the chain including the janitor, they sent me a letter stating they were deleting the tradeline. I think they were just tired of me contacting them every Monday like clockwork. I was even calling them and at one point they requested I stop calling them over that matter so then I switched to calling them every Monday asking them if I had any new collections with them, haha.

It's a game to me, now. They pay $15 an hour to those CSRs and I am happy to sit on hold and ask legal questions until they roll over. "I am calling today because I once had a debt collectable by you and I just want to check to make sure I don't have any new debts. Oh, that's good, can you please check one more time? Wonderful that I don't have any new debts, I will call you again soon to check again just in case."

Re: could really use some advice

Mike2 — Tue, 10 Oct 2017 16:25:23 GMT

Maaan thats dedication!!!!! You Inspire Me!!!

Re: could really use some advice

Anonymous — Tue, 10 Oct 2017 16:30:46 GMT

There's no reason NOT to saturate a credit or collection agency with requests unless they tell you to cease and desist contacting them. If one person says no, there are probably another dozen (or hundreds) of other employees who you can contact. LinkedIn is a great resource for finding the names of those people and if you can get ONE person's email address and note the structure of how it's created (first name, last name, domain name) you can try to contact others by email. Same with faxing -- some credit companies have dozens of groups with dozens of fax numbers. Use them all over time.

With a collection agency or JDB, it's even more fun to call and talk to them about things. Using the "Do I have any new collections with you?" method is really fun because you know they're rolling their eyes and your phone call is seriously destroying their internal rating for amount of time spent on calls versus collection amount. Since your collection amount is $0, and they know you're going to call again and again and again to "check on any new collections", they're going to know their internal collection rating is going in the toilet when they know how many months ahead that item will continue to report.

It makes me laugh every time. I wish I could be a pro bono collection agency phone caller for everyone because I like doing it so much. Turn the tables on those harassing inbound phone calls for sure!

Re: could really use some advice

Anonymous — Wed, 11 Oct 2017 16:32:11 GMT

Why don't you use your 10% down payment to pay your debts? The replace the money in the next 6 months while being debt free?

Re: could really use some advice

NC_Mtg_Loaner — Thu, 12 Oct 2017 23:53:13 GMT

APR 28 brings up a good point.....

2/3 of your credit score is determined by algorithms that monitor your accounts that are open and actively reporting and this is the main reason why you'll often hear folks stress that paying your bills on time each and every single month is the best thing you can do for building and maintaining your score. Even if you pay those cards down below the 50% utilization ratio, i'd bet you'll improve your score.

If the utility and the collection are the only derogatory accounts in your profile and they total less than $500 I'd simply pay them off so that the sooner they report as $0 balance paid the better you'll be six months from now vs. this "kicking the can further down the road" but not settling anything. I'm of the opinion that if your creditors had valid claims against you, why not simply pay them off, keep your proof of payment as evidence to send to all three bureaus upon receipt and move on.

Playing games can waste a lot of time and you can't fight City Hall. Bob's Collection Co. doesn't mind wasting your time even though they want to get paid, heck, every time you contact a creditor they might be "updating" your account status and bringing it current again--nothing worse than a derogatory account punishing you again and again. (It's the theory of "you don't want to awaken a sleeping dog") but anyway.....it seems strange that your score is that low just because of 1x30 on a credit card a year ago and these two tiny collections.

just my $.02