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Huge issue- underwriting for FHA has stopped today, problem with two derogs- one out of SOL!

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New Member

Huge issue- underwriting for FHA has stopped today, problem with two derogs- one out of SOL!

Hey all, been here since 2005 or so and never had to post until now.

 

I have a mid score of 620, we were in underwriting and kicked back out yesterday.  Two issues were showing "Account information disputed by consumer and Resolved, consumer disagrees".  They said they won't touch the file until these issues are off the credit report.  I contacted the first collection, and settled today and paid.  The second is an issue:  I disputed this about 6  months ago, because it was out of the SOL!  Now, it is still listed on transunion and Experian, with "Resolved, consumer disagrees".  I logged into the Calvary (spelling) site last night and received a pdf letter that said this: 

 

"Original Institution: Capital One Bank USA, N.A.

Principal Due: Charges Due: $561.45 $0.00 $603.44

Interest Due: $41.99

Current Creditor.: Cavalry SPV I, LLC

 

We are required by regulation of the New York State Department of Financial Services to notify you of the following information. This information is NOT legal advice: Your creditor or debt collector believes that the legal time limit(statute of limitations) for suing you to collect this debt may have expired. It is a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., to sue to collect on a debt for which the statute of limitations has expired. However, if the creditor sues you to collect on this debt, you may be able to prevent the creditor from obtaining a judgment against you. To do so, you must tell the court that the statute of limitations has expired. Even if the statute of limitations has expired, you may choose to make payments on the debt. However, be aware: if you make a payment on the debt, admit to owing the debt, promise to pay the debt, or waive the statute of limitations on the debt, the time period in which the debt is enforceable in court may start again. If you would like to learn more about your legal rights and options, you can consult an attorney or legal assistance or legal aid organization. Cavalry Portfolio Services, LLC Contact Information: 1-866-434-2995 Monday-Thursday: 9am to 9pm Eastern Time"

 

I forwarded this letter to our broker, thinking this would be sufficient for the underwriter.  She sent a not-so-nice reply back saying she received it, but they won't move forward until the dispute is off the credit report.  I am supposed to close March 2. 
My question is: If I call transunion and experian and fax them this letter, would they act on this before 30 days?  Should I just pay the settlement offer of $362 and be done even though this is from 2005?  Or should I call Calvary and ask them to remove it since the SOL is up and they admit this....

 

Thank you in advance.  I just don't have 30 days.  And I am not happy with the cold shoulder from our broker.  Suddenly we aren't worth her time.

 

Tim

5 REPLIES 5
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Established Contributor

Re: Huge issue- underwriting for FHA has stopped today, problem with two derogs- one out of SOL!

For cases assigned on or after 10/15/13, if the credit report reveals that the borrower is disputing any credit accounts or public records, and the total of all outstanding balances for all disputed derogatory credit accounts for all borrowers is greater than or equal to $1000, downgrade to refer and manually underwrite the loan. If it is less than $1000, a downgrade to manual underwriting is not required. Disputed charge-offs, collections, and late payments in the last 24 months are considered derogatory. For excluded derogatory account types, please consult the Online version of FHA Single Family Policy Handbook 4000.1.

 

^This is the verbiage on our Automated Underwriting system. Do you have more than a $1,000 in disputes? If not, it should be fine to keep moving forward unless your mortgage broker has an overlay.

Licensed in IL
Message 2 of 6
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New Contributor

Re: Huge issue- underwriting for FHA has stopped today, problem with two derogs- one out of SOL!


@tmess wrote:

Hey all, been here since 2005 or so and never had to post until now.

 

I have a mid score of 620, we were in underwriting and kicked back out yesterday.  Two issues were showing "Account information disputed by consumer and Resolved, consumer disagrees".  They said they won't touch the file until these issues are off the credit report.  I contacted the first collection, and settled today and paid.  The second is an issue:  I disputed this about 6  months ago, because it was out of the SOL!  Now, it is still listed on transunion and Experian, with "Resolved, consumer disagrees".  I logged into the Calvary (spelling) site last night and received a pdf letter that said this: 

 

"Original Institution: Capital One Bank USA, N.A.

Principal Due: Charges Due: $561.45 $0.00 $603.44

Interest Due: $41.99

Current Creditor.: Cavalry SPV I, LLC

 

We are required by regulation of the New York State Department of Financial Services to notify you of the following information. This information is NOT legal advice: Your creditor or debt collector believes that the legal time limit(statute of limitations) for suing you to collect this debt may have expired. It is a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., to sue to collect on a debt for which the statute of limitations has expired. However, if the creditor sues you to collect on this debt, you may be able to prevent the creditor from obtaining a judgment against you. To do so, you must tell the court that the statute of limitations has expired. Even if the statute of limitations has expired, you may choose to make payments on the debt. However, be aware: if you make a payment on the debt, admit to owing the debt, promise to pay the debt, or waive the statute of limitations on the debt, the time period in which the debt is enforceable in court may start again. If you would like to learn more about your legal rights and options, you can consult an attorney or legal assistance or legal aid organization. Cavalry Portfolio Services, LLC Contact Information: 1-866-434-2995 Monday-Thursday: 9am to 9pm Eastern Time"

 

I forwarded this letter to our broker, thinking this would be sufficient for the underwriter.  She sent a not-so-nice reply back saying she received it, but they won't move forward until the dispute is off the credit report.  I am supposed to close March 2. 
My question is: If I call transunion and experian and fax them this letter, would they act on this before 30 days?  Should I just pay the settlement offer of $362 and be done even though this is from 2005?  Or should I call Calvary and ask them to remove it since the SOL is up and they admit this....

 

Thank you in advance.  I just don't have 30 days.  And I am not happy with the cold shoulder from our broker.  Suddenly we aren't worth her time.

 

Tim


Hey.  Ask your LO if they have a procedure for removing dispute comments. A previous lender thought they were helping my credit when they had their "credit rebuilding" department dispute an account and the result was a comment like yours.   My current lender had a procedure to remove it.  My LO had me call the credit firm that processes their mortgage reports. They had me write a note stating I was not disputing, they did some magic, and my lender ran another report and they were no longer on there. You can also call the bureaus and ask them to remove the comment since it is not in dispute. 

 

 

Message 3 of 6
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Re: Huge issue- underwriting for FHA has stopped today, problem with two derogs- one out of SOL!

Thanks, everyone- my LO was suddenly like "you're on your own" until you get the disputes removed... I did find this and we will work on making those calls today!  It's so frustrating, the lack of help this LO is giving to this issue.  We aren't criminals, and deserve respect and sometimes a little assistance.  

 

http://ficoforums.myfico.com/t5/Mortgage-Loans/Best-Way-to-Remove-quot-Account-In-Dispute-quot-for-M...

 

I should have contacted Shane.  Smiley Surprised

Message 4 of 6
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Re: Huge issue- underwriting for FHA has stopped today, problem with two derogs- one out of SOL!

You could contact us lenders here lol. Most of us originate in 50 states I assume.

Licensed in IL
Message 5 of 6
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Established Contributor

Re: Huge issue- underwriting for FHA has stopped today, problem with two derogs- one out of SOL!


@tmess wrote:

Thanks, everyone- my LO was suddenly like "you're on your own" until you get the disputes removed... I did find this and we will work on making those calls today!  It's so frustrating, the lack of help this LO is giving to this issue.  We aren't criminals, and deserve respect and sometimes a little assistance.  

 

http://ficoforums.myfico.com/t5/Mortgage-Loans/Best-Way-to-Remove-quot-Account-In-Dispute-quot-for-M...

 

I should have contacted Shane.  Smiley Surprised


Tmess:

 

Let us know how it goes.  I might be in the same predicament at the beginning of March.  Thanks for posting the link to the thread about AID.

 

Best of luck!

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