topic Re: Sub-620 FHA with BOA? in Mortgage Loans

Getting to 620...

MBOhio2 — Sat, 04 Feb 2012 19:41:00 GMT

02/04 UPDATE: While still keeping the possibility of a sub-620 loan in mind as a back-up, my current focus is on getting the 620 I need to get approved with my original lender!! Details of my journey, with updates, are below

Things are not looking good for my getting to 620 in the next few weeks and our current lender requires a 620 minimum score. I have paid $8K over the past 45 days to bring my utilization from 44% to 24% and I have received a 3 point score increase. Very depressing, but anyway, to the point. In order for us to close on the home we're building, which will be done in about a month, we may very well have to find a new lender.

The only thing really holding my score down are unpaid student loan COs (I have monthly payment plans on all of them) that occurred over 2 years ago, but that the lender continues to report as CO every month. My guess is that I'll have a middle score of about 610 when it's all said and done.

I understand that, in the past, BOA has accepted sub-620 credit scores for FHA mortgages. Does anyone know if they are still approving sub-620 FHA loans? Has anyone had experience with a sub-620 BOA loan and can tell me how it went?

Thanks in advance

Re: Sub-620 FHA with BOA?

boomhower — Fri, 03 Feb 2012 22:38:44 GMT

Not sure about BoA but Wells Fargo will do 610.

Re: Sub-620 FHA with BOA?

MBOhio2 — Fri, 03 Feb 2012 22:41:45 GMT

Thank you - that's very helpful so we have a few options because I have heard not-so-great things about BOA! Also, our house will be done very soon so beggars can't be choosers and it's good to know that we'll have a few options for getting approval.

Re: Sub-620 FHA with BOA?

DallasLoanGuy — Fri, 03 Feb 2012 23:46:01 GMT

i heard wells fargo would go even lower......

worth a shot

Re: Sub-620 FHA with BOA?

boomhower — Sat, 04 Feb 2012 01:30:59 GMT

@DallasLoanGuy wrote:
i heard wells fargo would go even lower......

worth a shot

They will technically go to 580 but the downpayment is higher and I've only read of a couple cases where anything close to that low actually went through.

Re: Sub-620 FHA with BOA?

Booner72 — Sat, 04 Feb 2012 03:05:26 GMT

I have read one post since I started here in May about anyone closing with a score less than 620 and I believe it was WF.

If you get your utilization lower than 24% you could get there - I'm sure you know the drill -- have one account report 1-9% and the rest lower. I seriously think that would do it. You are so very close......That's how I did it - If you find my old post "What will get me to 640" you can see a day by day play of how it all worked out. Long post, but might give you an idea. Do you have family you could borrow the money from since you don't want to lose the house you had built?

GOOD LUCK!!!!!!!!!

Re: Sub-620 FHA with BOA?

MBOhio2 — Sat, 04 Feb 2012 18:29:08 GMT

Booner - Thanks for your positive energy! Your success story has definitely boosted my hope!

Fortunately, we will have the finds to pay my overall util down to below 9% in about a week and half (no need to borrow) so that is definitely our plan! Within 2 weeks, all of my accounts, except one, will have a $0 balance and the one with a balance will be under 9%. However, given the very minimal movement I saw going from 42% to 24%, I'm just starting to lose hope that it's even possible for me to get to 620... I'm feeling like as high as I will get is 610 or 615.

But anyway, I'm trying to stay positive and we're going to do everything we can to get there and I'll update here in a few weeks.

Re: Sub-620 FHA with BOA?

Booner72 — Sat, 04 Feb 2012 18:36:27 GMT

Nahhh. It'll go up! I remember reading about the "sweet spot" being less than 20% for some people......You'll get it, I just know it.

Re: Sub-620 FHA with BOA?

MBOhio2 — Sat, 04 Feb 2012 19:34:13 GMT

Booner - I just read through your post from July-August 2011 and it was super helpful because I am definitely going though a similar situation. I guess the only difference is that I'm not aiming for a better rate, I actually need the 620 to be approved at all or we'll lose the house we're bulding So did you end up being added as a AU? Can you tell me more about that? Was it a family member or something?

Here's a quick snapshop of both my current scores (though some are old now, but I can't pull current ones myself) and some facts about what's holding my credit score down:

My scores:

EQ = 601 (yesterday from myfico.com)

TU98 = 628 (yesterday from myfico.com)

EX FICO v1 = 583 (in Dec 2011 before paying LOC down from 37% to 24% - don't know current score)

EQ = 601 (yesterday from myfico.com)

TU04 = 604 (in Dec 2011 before paying LOC down from 37% to 24% - don't know current score)

EX FICO v2 = 618 (in Dec 2011 before paying LOC down from 37% to 24% - don't know current score)

If my middle score is 620 with either of the above sets of scores, then I will be approved (lender uses two different scores sets). As you can see, I only need a few points.

My credit situation:

- Overall util of 24% (3 of my CCs have $0 balances, 1 CC has a $15 balance, which is already paid off and just waiting for update, and I have a large LOC with a 29% util that is my only revolving debt - In the past 6 weeks since lender first pulled my scores, I have paid my overall util down from 42% to 24%)

- I have a few 30-day lates that are all just over 2 years old

- In December 2009/January 2010, I had 11 student loan accounts charge off; the balance on these is about $100K and I have been making on-time monthly payments toward all 11 of these for over a year now, however, they are still COs and reflect on my credit reports as such

- No collections, no records and 3-4 inquiries

Soooo... I just paid another $900 toward the LOC on Thursday (Feb 2nd) and used the BOA update trick, so the new balance should update with the CRAs today. This will take my overall utilzation down to 21% and I'm crossing my fingers I get a SW alert in the next few days. On Feb 10th, the CC with a $15 balance will report the current $0 balance, so then only one of my revolving accounts will have a balance, the LOC. On Feb 15th and 17th, I plan to make two payments that will take my utilization on the LOC to just under 9%.

Tell it to me straight - does anyone think I can actually get to 620??

Also, quick question, when everyone says that your util % should be under 9%, they mean the individual util % on that one account, not the overall util %, correct?

Current hope = that I get a SW alert with some sort of bump for the most recent $900 payment!!

Re: Sub-620 FHA with BOA?

MarineVietVet — Sat, 04 Feb 2012 20:09:03 GMT

@MBOhio2 wrote:

Also, quick question, when everyone says that your util % should be under 9%, they mean the individual util % on that one account, not the overall util %, correct?

What seems to work best for most people is to have one CC report a balance of <9% ($1 will work just fine) and all other CC's report a zero balance every month. This means of course that both individual and overall utilization will be <9%.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Sub-620 FHA with BOA?

MBOhio2 — Sat, 04 Feb 2012 22:53:06 GMT

MarineVietVet - thanks for clarifying!

Re: Sub-620 FHA with BOA?

Booner72 — Sun, 05 Feb 2012 17:50:22 GMT

MBOHIO: The AU account was my dad's - My maiden name is on my reports, so I thought it would work - it never reported.

Keeping fingers crossed for you!!

I was shooting for 640, but would have done the loan at 620. At the time, as you read, I didn't even have the 620. It was until YESTERDAY that I finally got my EQ score up to 642 BTW. But take into account that I added a ton of new credit since buying the house. TU saved the day for me and I hope one comes through for you!

If you balances are all zero'd out except one, then i think you should be there. Student loans suck!

Re: Sub-620 FHA with BOA?

CS800 — Sun, 05 Feb 2012 18:09:09 GMT

@boomhower wrote:
@DallasLoanGuy wrote:
i heard wells fargo would go even lower......

worth a shot

They will technically go to 580 but the downpayment is higher and I've only read of a couple cases where anything close to that low actually went through.

+ 1. Down payment higher. That's what happened for me.

Re: Sub-620 FHA with BOA?

MBOhio2 — Mon, 06 Feb 2012 01:34:20 GMT

CS800 - What downpayment % is required? I read on another website that for scores between 580-619, WF requires a minimum downpayment of 5% - is that what you were told?

Re: Sub-620 FHA with BOA?

MBOhio2 — Mon, 06 Feb 2012 14:24:30 GMT

Booner - Thanks again for the info! Yes, student loans totally suck! Though I shouldn't complain too much because I am happy with my degrees and love my job, just wish my SL lenders would have been more flexible and allowed me to avoid this mess in the first place! Anyway, I REALLY want to avoid having to even think about messing with an AU, but I suppose it could be a last resprt plan if we get desperate.

Re: Sub-620 FHA with BOA?

MBOhio2 — Sat, 11 Feb 2012 19:00:19 GMT

UPDATE:

So I pulled both my TU and EQ yesterday from here on myfico.com. To my surprise, my TU went up from 628 to 641, but my EQ did not budge and is still sitting at 601.

I'm hesitant to be too excited about the TU increase because I feel like some additional dispute comments are what's raising my score, not any legit improvements. Since I last pulled my TU score on Feb 2nd, the following 2 things have happened:

1) I paid more $ toward the LOC so my overall utilization went from 24% to 22%

2) 2 accounts that used to say “Account information disputed by consumer” now say “Dispute resolved reported by grantor” and 3 other accounts that had no comments now also say “Dispute resolved reported by grantor”

From what I understand, the comment of “Dispute resolved reported by grantor” indicates that there is no longer an active dispute (i.e. there was one, but it's now resolved). However, I feel like the jump from 628 to 641 was just too big to be caused by such a small decrease in utilization, so the disputes must be affecting my score.

The head UW at my current lender reviewed our credit reports when we first applied for pre-approval (I wanted to make sure he saw my student loan issues before giving us pre-approval) and this is what he said:

"You have several accounts that are shown as disputed. All disputed accounts must reflect as resolved, 0 balance or be under $500 and over 2 years old. These accounts don't meet any of those so they'll need to meet this FHA requirement before we close."

Based on the above, do you think the comments of “Dispute resolved reported by grantor” satisfy what the UW is saying is required?

Re: Sub-620 FHA with BOA?

MBOhio2 — Sat, 11 Feb 2012 19:02:28 GMT

ANOTHER UPDATE:

I was able to have TU completely remove the dispute comments so that even the new “Dispute resolved reported by grantor” is now completely gone (I had a letter from the creditor saying they were removing the comments, so TU was willing to immediately delete). That's great news because now I don't have to worry if the new comments will be acceptable to the UW because they are gone now. Even better, I pulled a new report and with the comments gone, my score stayed at 641, so it looks like the increase was legit, YAY!!

I am SOOO hoping that since TU98 is increasing so much, TU04 will be too!!

NEXT ACTIONS:

1) My one CC that reported a balance of $15 last month now has a $0 balance and closes today, so it will be reporting the $0 balance to the CRAs within the next few days (by Feb 14th). This will make it so that all of my revolving accounts, except one (the LOC), will have a true $0 balance.

2) We are paying another lump sum to the LOC next Wednesday that will take my overall utilization from the current 22% down to 16% (under 20%!!) and then that lower balance should report a few days later (by Feb 20th).

I will let everyone know if the above two changes have any impact on my score because as soon as both updated balances are reported, we're going to have our LO pull my scores again!! (approx Feb 21st)

Re: Sub-620 FHA with BOA?

Repo-ed — Sat, 11 Feb 2012 02:33:10 GMT

This has been such an intense read! I'm really pulling for you!

Re: Getting to 620...

Anonymous — Sat, 11 Feb 2012 02:33:26 GMT

is your student loan with AES? if so i can help u with that, that was happening to me also before I found what to do..

Re: Getting to 620...

Tpelc23 — Sat, 11 Feb 2012 02:51:32 GMT

great thread thanks for keeping us posted i,'m also trying to get to a 620