FHA mortgage approval and defaulted student loan in collections

[treschic]

I'm hoping to get a FHA loan in the next 12-24 months. I have a defaulted student loan that went to collections. I have entered into a repayment agreement with the collection agency. Due to the amount of the loan >100k, i will not be out of default anytime soon and the loan is not elligible for rehab. What are my options for mortgage approval? as far as I know, the loan will remain in default until its paid off, which is probably like 20 years from now. :-(  I tried to consolidate the loans and the Dept of Education stated they were not eligible for consolidate b/c they are defaulted. I know this is the mortgage forum, so i am asking from an approval standpoint in 1-2 years, what are my options? Thanks for any help!!!

[NC_Mtg_Loaner]

student loan defaults are definitely a problem when it comes to originating as your lender needs to calculate your repayment amount into your DTI in order to approve you for any type of GSE (Govt. Sponsored Entity) insured loan program.  (FHA, VA, USDA, Conventional)

Get a regularly scheduled monthly payment plan started and in 4-6 months you could likely be ready to roll.

(at least on the student loan front)

[homeloanexpert]

 I concur with the previous post. It's not as bleak as you think. I see this all the time. You're basically on probation. Once they see that you are making your payments on time, you can request a rehab. Most of the time they grant it and after 6 months of on time payments they will generally recall the CAIVRS claim (if you were reported). Hang in there! There is light at the end of the tunnel.

Best wishes to you!

[treschic]

i've posted in the student loan forum, but i can't rehab the loans. i already rehabed in 2010/2011, and i was told they were not eligible to rehab. i've entered into a repayment arrangement, but not sure what to do from here on. i know i need to wait about 12 months, to show a proven track record, im just trying to get all my ducks in a row. the current defaulted student loan is not showing on my credit reports, yet, not sure if thats good or bad. any advice for how this is handled when i'm ready for to apply for a mortgage? can i ask the collections agency to recall from CAIVRS system? im just wondering what the next steps typically are. thanks for any help!!

[Anonymous]

Home loan expert, please email me at doc@sigfirm.com I am a Realtor and looking for a home loan. Would love to ask you some questions. 

Sorry to piggyback on this post, new here and could not figure out how to message you directly. 

Thanks

Doc 

[Anonymous]

This is a question for "homeloanexpert"... You  said in your post on 9-17-2018 in this thread (If you were reported - to CAIVRS).  So my question: are there situations where one has a defaulted student loan and isn't in CAIVRS?  I think I have an old student loan (20 years ago) that is defaulted and I think it was a govt loan so I should be in CAIVRS, but I don't know that I am for sure.   So, again, are there situations where those loans aren't reported? And is there ANY way to pull a CAIVRS report before entering into the mortgage process?

[VALoanMaster]

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@Anonymous wrote:

This is a question for "homeloanexpert"... You  said in your post on 9-17-2018 in this thread (If you were reported - to CAIVRS).  So my question: are there situations where one has a defaulted student loan and isn't in CAIVRS?  I think I have an old student loan (20 years ago) that is defaulted and I think it was a govt loan so I should be in CAIVRS, but I don't know that I am for sure.   So, again, are there situations where those loans aren't reported? And is there ANY way to pull a CAIVRS report before entering into the mortgage process?

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Hey Kevinwill,

If the student loans were not government backed, you will not be in the CAIVRS system. If they were, there is still a chance that you may not be in the system.

The only way to find out is to have a lender pull a CAIVRS report on you.

[Anonymous]

Thanks, VALoan! Under what circumstances would a govt loan not be in CAIVRS?  I just don't know the status of mine, just seems like there should be an easy way to get a CAIVRS report without having to go halfway through the mortgage process, seems like a bank would want to know up front also, so a bunch of time isn't wasted....

[VALoanMaster]

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@Anonymous wrote:

Thanks, VALoan! Under what circumstances would a govt loan not be in CAIVRS?  I just don't know the status of mine, just seems like there should be an easy way to get a CAIVRS report without having to go halfway through the mortgage process, seems like a bank would want to know up front also, so a bunch of time isn't wasted....

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It's possible that were never reported to CAIVRS in the first place.

Yeah I have never understood why lenders wait to pull CAIVRS until a loan is in underwriting.

I have my assistant pull CAIVRS on every pre-approval I do so we know upfront if there is an issue.

[Anonymous]

Thanks, can your assistant pull mine?(I ask half jokingly...only half)

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