topic Re: Fighting for every point (FICO) in Mortgage Loans

Fighting for every point (FICO)

Anonymous — Wed, 15 Apr 2009 23:50:33 GMT

It all started when in January 09 I decided it was time to buy a house and get out of an apartment I have had credit problems in the past 2004 following my divorce.

I didn't want to put the cart before the horse so the first thing I did was contact a mortgage lender. I told him I wanted a pre-approval before I even started looking for a house. He asked me a few questions and sent me a letter. A Pre-qualification letter not a pre-approval.

I looked at about a bajillion houses with my realtor and finally found one. I had been keeping in touch with my mortgage lender this entire time talking about community action programs that provides $6k for down payment/closing cost assistance.

So I call the lender on February 23, he tells me he has good news and bad news. The good news is that he verified I do qualify for the grant assistance, the bad news ....I no longer qualify for the FHA loan we had been discussing. (needless to say it was not a good day)

He explains that FHA changed their FICO requirements and the 580 score was no longer on the low end of the FHA scale. On April 1, 2009 their minimum score would change to 620 and since we would not close by April 1 . I had to have a minimum FICO of 620. I told him I knew that FHA has a 580 for desktop underwriting and 620 for automated he said that will no longer be the case as of April 1. Even desktop requires 620.

He said that FHA bases the minimum score on the middle of the three scores and my middle score is 618 just two points below the minimum.

Since that date I have paid off every chargoff/collection on my credit bureau..Every one even the ones that were awarded to my Ex. The one tax lien I have is being released. I had moved in 2004 and failed to file state taxes. I just filed for the 2004 tax year and it was determined I did not owe state taxes, in fact they owe me $50. But it is still listed as a lien and I have a letter it will be released but it still shows as active on my bureaus.

I sent him letters from all the creditors and the state of CA saying the charges were paid in full and the lien was released. He told me Monday March 6, 2009 that he was sending in something called a rapid rescore but has as of yet received no answer.

I have asked for a pre approval even offered to pay for the process so all I had to do was find a home, I have asked for a good faith estimate and have received neither.

LOL now that you know my life story ....Is this guy yanking my chain or does all this sound legitimate?

Re: Fighting for every point (FICO)

Anonymous — Wed, 15 Apr 2009 23:58:41 GMT

He isn't yanking your chain about the 620, that has become industry standard.

I don't want to upset you but you might not necessarily raise your score by paying off chargeoffs/collections. You might have reaged them. However, the good news is that getting a tax lien released will be good for some points but how many is anyone's guess.

He also isn't yanking your chain about the rapid rescore, it does exist. However, I don't know how long they take but a month does not sound right to me. Heck in 6 weeks, without a rapid rescores you could have done it yourself by mailing everything you mailed him to the bureas yourself. When I acted to have a paid judgement remoevd, it took 2 weeks from the time I sent the bureaus the court papers.

If it were me, I think I might go somewhere else. Plenty of LO out there.

Re: Fighting for every point (FICO)

Anonymous — Thu, 16 Apr 2009 00:20:07 GMT

One other thing. When I first started working with him he told me that the FICO score used is the three scores averaged together. Now he says I misunderstood and it is the middle score of the three (regardless of the other two) that counts as the FICO score used to process the application. Is this correct?

Re: Fighting for every point (FICO)

Anonymous — Thu, 16 Apr 2009 00:26:15 GMT

It is not the average of the three but the middle score irregardless of the two others.

Re: Fighting for every point (FICO)

Anonymous — Thu, 16 Apr 2009 01:29:08 GMT

$64,000 questions:

Do you have any credit cards? Any installment loans (car, student loan, etc)?

FICO likes to see two things: a mix of credit and good use of credit (AKA, paying everything on time and using only the credit you can afford to reasonably pay off). If all you have on your CRs is collections and tax liens, it says you're not using credit at ALL.

You need some good to outweigh the bad. I was able to pull up DH's FICOs by opening a few CC accounts and using them sparingly and paying them on time. Roughly 6 months, give or take, later, we brought his score up over 200 points (with the help of everyone here with their awesome advice!)!

If WE can do it, YOU can do it.

Are ANY of the collections medical in nature?
If so, by HIPAA law, they have to be removed once they're paid. Get thee over to the Rebuilding Your Credit forum and snag the HIPAA letter (stickied at the top of the thread listings). Then, start posting threads about your situation -- post your baddies and ask how to deal with them.

That's EXACTLY what we did. And it worked.

What EXACTLY are your FICOs? Holler back, so we can help!

Re: Fighting for every point (FICO)

Anonymous — Thu, 16 Apr 2009 01:49:53 GMT

The majority of the collections are medical.

I have two student loans (currently deferred) I am still a full time student and working full time.

I have two car loans that were paid off in 2005. One car loan shows 3x30 and 1x60 in june of 2004 the other showed 4x30 in july 2004 (during the divorce process).

I have two current revolving accounts one is a 100 credit limit open 5 months all paid on time. The other is from my being an authorized user on my mother's Sears card, perfect payment history, open for 10 years $8,500 credit limit with $1600 balance.

I have one mortgage loan paid as agreed and paid off in 2002.

One federal tax lien in 2002 paid and released.

One state tax lien in 2004 still showing active but is due to be released as stated earlier I didnt have to pay it because it was filed based on an estimate of taxes owed but when I (last month) filed my CA state taxes they owed me $50 and sent a letter of intent to release lien.

$149 verizon chargoff 2004 paid this month

$36 chargoff 2004, paid this week.

$62 Chargoff 2004, paid this month.

other collections and such are medical in nature.

I know it sounds terrible, I totally neglected everything during divorce and then last year I had major surgery that added new medical bills. Those medical bills are all paid off as well within the last two months. I have paid off over $2000 in charge off collections in the last two months all but the above mentioned items were medical in nature.

TU 578, EQ 618, EX 618

Re: Fighting for every point (FICO)

Anonymous — Thu, 16 Apr 2009 02:29:34 GMT

Student loans are a tough one. You can have them excluded in your Debt-To-Income ratio if they'll be deferred for a minimum of 12 months but that's hard to do because technically you can drop out at any time.

Getting credit cards to 9% would be helpful for a few points. With $8600 total credit, you'd want them under $774. The 1-9% bracket is best. Not sure how possible that is though with it being your mom's card.

Re: Fighting for every point (FICO)

Anonymous — Thu, 16 Apr 2009 02:59:17 GMT

update I just found out my TU is 630 EQ is 618 and EX is 618. literally 2 points away from qualifying.

Re: Fighting for every point (FICO)

teton — Thu, 16 Apr 2009 03:34:53 GMT

This will be difficult at this point, since the CAs have already gotten payment from you, but you might try GWing them to see if they will remove the collection accounts from your reports.

Re: Fighting for every point (FICO)

Dee2 — Thu, 16 Apr 2009 11:58:45 GMT

Hi Yondrea,

check your EQ credit report thoroughly. See if you can find any recent inquiries that you can dispute. I disputed an inquiry on my EQ credit report over the phone. Within 3 or 4 days the inquiry was removed and my score went up by 3 points.

~Dee

Re: Fighting for every point (FICO)

Anonymous — Thu, 16 Apr 2009 14:51:13 GMT

March 27, 2009 Firstunitedban/datafacts

February 26, 2009 Firstunitedban/datafacts

January 29, 2009 Firstunitedban/datafacts

September 27, 2008 Gemb/paypal

July 29, 2008 Firstmortgageco/Usc

July 18, 2008 Cmh Homes

July 8 2008 Quickenloansinc/credsta

July 7, 2008 21st Mortgage Corp

March 27, 2009 Datafact

February 26, 2009 Datafact

January 29, 2009 Datafact

July 29, 2008 Usc

July 17, 2008 Fac-Scm

July 12, 2008 Gemb/Walma

July 8, 2008 Credstar

May 13, 2008 Gemb

Re: Fighting for every point (FICO)

Anonymous — Fri, 17 Apr 2009 11:59:06 GMT

I would not recommend disputing at this point in time. Lenders don't like to see disputes. Plus most inquiries are legitimate and it's not right to dispute accurate information.

I would make sure one credit card is reporting no balance and the other credit card is reporting no more than 9% of the limit. Since there isn't much you can do about your mother's card, just make sure yours reports zero balance. I would think the 10 years of history is helping more than the utilization is hurting so as long as the history is good, don't touch that one. Then I would send goodwill letters to the creditors with the lates, asking them to remove the lates. Definitely work the HIPAA process on the medical collections. Good luck! You'll be there in no time.

Message Edited by rmily on 04-17-2009 06:59 AM

Re: Fighting for every point (FICO)

Anonymous — Sat, 18 Apr 2009 03:57:56 GMT

As of today TU 632, EX 666, EQ 618

Re: Fighting for every point (FICO)

fused — Sat, 18 Apr 2009 04:09:21 GMT

Actually, I advised them to stay away from the HIPAA process since they only need two FICO points. Clearly, once her over-the-limit CC reports new util well below 10%, her scores should improve quite a bit. Its a bad idea to start the HIPAA process if you plan on apping for anything.

Re: Fighting for every point (FICO)

WannaHouse — Sat, 18 Apr 2009 04:20:11 GMT

YEA!!!! You have a 632 midscore now!! You did it!

Now go back to your lender and get the ball rolling!

Message Edited by WannaHouse on 04-17-2009 11:20 PM

Re: Fighting for every point (FICO)

fused — Sat, 18 Apr 2009 05:07:30 GMT

Congrats, Yondarea!!!!!!! Once you close on your home, then we can go to work on your med collections without worrying about your house, if you want.

Re: Fighting for every point (FICO)

Anonymous — Sat, 18 Apr 2009 05:26:37 GMT

So check it out,

I call the lender and tell him my middle score is 632 right? So he says he sent in a rapid rescore last week and still hasn't heard back from them.

I tell him so what I don't need him to hear back from the rapid rescore people anymore, I checked my FICO today from myfico.com and my mid score is now 632. He says he really needs to wait for the rapid rescore to get back to him before he sends it to underwriting to get me a pre approval letter.

Is it possible I have someone who is just really green behind the ears because that just doesnt make sense to me.

Re: Fighting for every point (FICO)

Anonymous — Sat, 18 Apr 2009 16:29:01 GMT

We did a rapid rescore in the last month or so. Once I sent the info into my LO it took a little over one week to get my new score. The LO worked with a vender who contacted the bureaus. It took a few days for the bureaus to update, but once they did they let the vendor know. The vendor called my LO and gave the greenlight to pull a new report. She did and viola - they were all over 620. It does take longer if you have a lot of trade lines being updated. We had 5 and like I said, it was a little over a week.

Its likely that at least some of the info has been updated so your score increased. You should peruse your report to see what has and what has not updated. If its all updated and your LO is still dragging his feet I would consider going elsewhere. Be mindful though that rapid rescore isn't free. Ours is being included in the closing costs, but if you go elsewhere you may get charged by this guy. I don't really know how that would work.

Good luck!!

Re: Fighting for every point (FICO)

Anonymous — Sat, 18 Apr 2009 18:20:05 GMT

Your LO is telling the truth. They can not proceed based ona copy of a report obtained by you. If they have started the process for a rapid rescore, they will have to wait to go by that.

Re: Fighting for every point (FICO)

Anonymous — Tue, 21 Apr 2009 07:15:49 GMT

ok two things......

EQ 604, EX 641, TU 664

DU through FHA was approved yayayay

secondly,

The offer on the short sale I submitted on saturday received a counter offer from the lender and I have sent my response looks like we may have a contract.....wish me luck!

After we have the contract solid then it will be time to get it closed.