Are multiple lates affecting my score?

[Anonymous]

Hi all, great site and great information. I am a newbie to these forums and haven't found what I'm looking for through search. 

My situation is this:  Completed DMP in 2006 through CCCS. Since completion, my wife and I have acquired land and are just about finished building our home. Took out construction line of credit in aug 08.  My score at the time was 680 give or take. My wifes at the time was 718. The lender at the time was asking about late pays on both our histories. Explained that we had gone through DMP. Everything was approved and have been going fine. Getting ready to convert to 30 yr. fixed. Ran reports through MYFICO and scores are 650 TU and 653 EQ. My wife's are 673 TU and 660 EQ. My util is at 99% and hers is 74%. We will be paying down to below 20% on both in the next week. (Whew!) 

My question is this, just discovered 17 consecutive 30 day lates and 2 60 day lates starting 3 mos before DMP payments started (July 2003) but after they said to stop paying(DMP) while in nego?. The last late was in 2005.  My wife has at least as many. They are from Providian bank which then became WaMu and is now Chase. Everything is fine after it was paid (3/05) and haven't had a late payment on any account since. How badly is this affecting our scores?

[medicgrrl]

I would imagine it is your utilization that has brought your scores down.  Those lates were reporting when you obtained the construction loan, correct? 

[Anonymous]

Yes they were. The lender questioned us about them and he knew that we had completed DMP. He is the same lender we will be obtaining the new loan from, although he told me the LOC was in house and the MTGE will be sold. My concern is that overall it looks bad and with lending guidlines tightening up I wan to make sure I have every point I can. Should these be disputed? Contaced the DMP about it and they will provide me with documentation prove accounts were paid as agreed.

thanks

[medicgrrl]

I wouldn't dispute them thru the CRA's.  See if you can find a backdoor number to Chase on here.  At minimum see if they will remove the 60 day lates.  Explain to them that you went thru DMP and were under the impression that you would not be shown as late.  I have seen a couple of posts about certain CCC's that will rehab your account and remove the delinquencies.  See if you can search the forum to find out if Chase is one of them.  Also, will you qualify for FHA financing?  I'm not sure that you will get your scores high enough for conventional but I would imagine you won't have any issues for FHA.

[Anonymous]

Thanks for the info, I'll see what I can find out, I'm not too sure if we are eligible for FHA. I am the home builder so we're not really purchasing the house, as I built it. I don't know how that works with FHA loans. Any info would be helpful.

[medicgrrl]

Is your company doing the construction loan?  I would go over to the mortgage forum.  I think you would be able to treat it as a refinance with FHA based on cost to construct etc.  It has been a while since I have processed or underwritten an FHA so I really can't remember.  The MIP would be higher than going conventional but the lenders have been so tight on financing conventionals lately that it may be a better alternative for you.

[medicgrrl]

This is what I found in the 4155.  I am not sure if there have been any mortgagee letters updating this.  This is the guideline based on a construction/perm.  I would imagine if they allowed it on that then they would allow it on a "refi"

The borrower has contracted with a builder to construct the improvement. (This program is not available to a borrower acting as his or her own general contractor, unless the borrower is a licensed builder by profession. In this case, the acquisition cost must be determined by the actual documented cost to construct the improvements.)

[Anonymous]

Here's how the building/financing of the home has been done. I have worked in home design and construction for about 13 years. I have been self employed for about 8 years as a designer/consultant mostly for owner/builders. In 2007 my wife and I were able to take out a loan to buy a VACANT piece of property. The intention all along was to act as my own G.C. as I have the experience just not the GC license. We paid cash and utilised CC's as well as LOC through local lumber yard.  Got tired of doing the CC dance, went and talked to CU. Went through many scenario's to find a solution and ultimately settled on construction LOC to pay off all previous debts and finish the house.  Due to me not being licensed, bonded and insured it was a little tough to get the loan but I guess my resume did the talking.  I also did literally all of the work subbing out only roofing and drywall, so my LTV is about 60%.  My lender said today that we will probably be looking at around 5-5.25 based on the scores I posted earlier and today's rates.I guess we're already pre-qualified through the lender. Just waiting for CC balances to report as low, and get final appraisal before running CR's. 

[medicgrrl]

Very cool!  With that low LTV I am sure they are more than happy to provide the perm financing.

[Anonymous]

 I'm not worried about my score so much for approval, more for the magically low (4.25?!?!) rates that I keep seeing. My lender tells me 740 is needed for that kind of rate.. Oh well, 5-5.25 is still not historically all that bad. Maybe next time. Thx for your replies!