Im trying to purchase my first home. My credit has been rough and taken years to be where i am now. I have a repo from 3.5 years ago that shows collection/charge off. Local bank is saying financing cant be given at this time with that. Ive done what i shouldnt have and applied at rocket mortgage and they are saying the same. The amount owed for the repo is 13000 and ive bought 3 vehicles since paying off 2 of them and havent been late on a payment in over 3 years for credit cards or auto loans. Both credit cards are at a zero balance. Not sure i can be approved for financing at this time but id sure like to get some more info or options from other people in my situation. Im located in Northwest Arkansas.
When we applied for our mortgage, I had a charge-off from an auto reposession in 2011. For me to move forward in the process, our lender stated that I needed to have the account closed and report a $0 balance. I contacted that bank and ended up settling and not paying the full balance. In my case, the full balance was $1600, and the bank made me pay half of that. The reposession will be removed from my credit in January 2018.
You should check the statute of limitations in your state for auto charge-offs. If you're still within the limits then the bank that has that auto lien may not be willing to settle with you for a lower amount because they technically could still sue you for the full amount if they wanted. If you aren't in a rush to buy a home, I would wait until you are outside of the statute of limitations and try settling. You have another 4 years to go before it's removed from your report.