30 day late reported after FHA Mortgage Refinance

Anonymous · ‎08-02-2017

This keeps disappearing. Hope I don't have a triple post out there..........

Hello, in August of 2016, my wife and I refinanced our FHA mortgage (@3.125%). Our mortgage company told us to not make our August 2016, payment as that amount was included in the payoff. Now that we are in the process of buying a new house, I learned that the lender reported a 30 day late payment on September 1, 2016, as they did not received the payment in full until August 31, 2016. The lender is saying that although they received the payment on the 31st, it is still 30 days late. I have also sent them the wire transfer statement, the HUD settlement statement and a copy of our TransUnion credit reports that show the 30 day late entry.

Is that truly a 30 day late, or would it go to a 30 on the 31st day (September 1) (may be a stupid question)? They have submitted our claim to their credit reporting department but we won't hear back for about three weeks.

This is affecting our new home loan as it lowered my credit score to a 739 and my wife's to a 753. We were both a bit over 800 last year, but we have since opened up some other accounts, so I expected it to go down some, but we really want that 30 day late off. We will be paying a higher interest rate and higher mortgage insurance premiums due to this. Also, our mortgage guy is telling us that it absolutely not have been reported as a 30 day late and that FHA payoffs have different rules than conventional. We have absolutely no other adverse information on our credit reports.

What are my options? Just wait to see what the lender's credit reporting department says? I can't file a dispute as that would put everything on hold with regards to our new mortgage.

This is frustrating.

Thank you for any insight you may have.

StartingOver10 · ‎08-03-2017

@Anonymous wrote:
This keeps disappearing. Hope I don't have a triple post out there..........

Hello, in August of 2016, my wife and I refinanced our FHA mortgage (@3.125%). Our mortgage company told us to not make our August 2016, payment as that amount was included in the payoff. Now that we are in the process of buying a new house, I learned that the lender reported a 30 day late payment on September 1, 2016, as they did not received the payment in full until August 31, 2016. The lender is saying that although they received the payment on the 31st, it is still 30 days late. I have also sent them the wire transfer statement, the HUD settlement statement and a copy of our TransUnion credit reports that show the 30 day late entry.

Is that truly a 30 day late, or would it go to a 30 on the 31st day (September 1) (may be a stupid question)? They have submitted our claim to their credit reporting department but we won't hear back for about three weeks.

This is affecting our new home loan as it lowered my credit score to a 739 and my wife's to a 753. We were both a bit over 800 last year, but we have since opened up some other accounts, so I expected it to go down some, but we really want that 30 day late off. We will be paying a higher interest rate and higher mortgage insurance premiums due to this. Also, our mortgage guy is telling us that it absolutely not have been reported as a 30 day late and that FHA payoffs have different rules than conventional. We have absolutely no other adverse information on our credit reports.

What are my options? Just wait to see what the lender's credit reporting department says? I can't file a dispute as that would put everything on hold with regards to our new mortgage.

This is frustrating.

Thank you for any insight you may have.

I highlighted the statement that got you in trouble. Never do that - it hurts you and doesn't hurt the lender that is refinancing your loan. I know it's too late for you individually now, but for you in the future and for others make all of your payments on time and don't hold off because your refi is supposed to close. Anything can happen in post closing to prevent the payoff from getting there in time. Just so you know, the bank can not keep any extra payments. If you have paid too much - they will send you the overage back along with your escrow as soon as they process the payoff. This is normal. It was a very foolish statement made to you by someone that has no idea that the lender refunds the overage (apparently).

As far as FHA having different reporting rules for payments...that isn't so. The differences he is referencing is the application of the interest and principal in the final payoff which is not what you are experiencing now. You either pay on time or not. You can explain your error but it is a real shame that you have to go through this because someone gave you bad info. Never hold off on making your payment on a mortgage. You are the one that is on the losing end. One more point: the mortgage payment you make on the first of the month goes toward the previous month's interest + a little bit of principal. So you had incurred that debt already. Paying your mortgage on time would have reduced the amount owed but only by the interest calculated for that one month. The reconciliation is done when the payoff is sent to the lender and the refund for the overage is sent back to you.

Anonymous · ‎08-03-2017

I appreciate the response. What's done is done now and I should have known better, but I was just following the advice I was given. I just hope the lender looks at the totality of the circumstances and removes the 30 day. They can see that I was never late and they received the full balance of the loan before the next due date. I've had two mortgages with this particular company and there were never any issues previous to this.

I guess It's not the end of the world if they don't remove it, as we have already been through desktop underwriting for our new mortgage, but we will be paying a little more per month if it stays. I do have time on my side to try to get this fixed though, as our new home won't be completed until December. I guess we'll just wait and see.....

StartingOver10 · ‎08-03-2017

Your circumstance is the perfect case for a Good Will Letter writing campaign. You have a long history with the same lender with no lates. Try it. It is possible you can get the 30 day removed.

Anonymous · ‎08-03-2017

That's what I have done. I wrote the letter and sent the documents they requested. It's a waiting game now. I may write another letter and email it off just for good measure to re-emphasize some points. Thank you for your response.