New collections placed on account during underwriting

[GC2025]

I am currently under contract for a new house and in the underwriting process. My credit was pulled last week and I met the requirements to pre qualify for the loan. Today I had 5 new medical collections placed on my credit totaling about 5k. My middle score has dropped and I am now 13 points under the score I need to qualify. I spoke to the lender yesterday and he said there would not be an additional hard pull before closing but a supplemental credit report will be requested. Would my new scores be included in the supplemental credit report? Is this something I should bring up or should I just wait to hear back from the underwriter? The lender is MI financial.

[ShanetheMortgageMan]

It's not common, but it's possible that if the underwriter sees there is new derogatory accounts at the final credit refresh (soft inquiry) that they may ask for a new credit report (hard inquiry) to be pulled to get updated credit scores.  Are you able to pay them off/settle them?  If so, then once they are $0 they would be removed from your credit report.

I'd wait to see what the initial underwriting review comes back with, but the underwriter may not be aware of the new medical collections until it's time to review for final loan approval.  After the loan is initially approved your loan officer can check with their underwriting manager to find out if your scores will be rechecked after the underwriter does their final credit refresh and sees the new medical collections.  Then that should give you some time to prepare.  

[GC2025]

Thank you for the information. We are scheduled to close in 38 days. At what point does the lender typically pull the supplemental report?

[ShanetheMortgageMan]

You're welcome. 

As soon as they are ready for final approval (meaning the very last of your loan approval conditions are being reviewed) they'll do the credit refresh.  If that event is beyond 10 days out from your closing then they'll do another credit refresh within 10 days of closing.