Question re Automated Underwriting System (Conventional)

[Anonymous]

Hello Everyone,

Loooong time lurker, first time poster.

I have a few questions about the automated underwriting system for conventional loans.  Please correct me if I'm wrong, but I think that I have to pass through (accept/approve?) the automated underwriting system in order to avoid more stringent manual underwriting guidelines or a flat out rejection.

Brief Background:

I defaulted on 9 revolving/installment accounts between late 2012 and mid 2013 resulting in a charge-off status for each account.  The total was approximately $18K.  I paid all of the acocunts in full in January 2014 and today all of the accounts say $0 balance.  I have one of those collection accounts still showing on the reports.  I found myfico well after I paid off all of the collection/charge-off accounts on my credit reports (I didn't know about PFD, etc).  

Please let me know if you think that any of the below issues will/may influence an approval/rejection in the AUS.

1. Some of my c/o have $0 balance listed, but haven't been updated to say paid.  The status is charged-off or sold.

2. Some c/o and collection accts say settled for less, rather than paid in full (still $0 balance).

3. One c/o says paid/$0 balance, comments say last paid in January 2014 (that's the date that I paid off all of my 2012-2013 delinquent accounts), but payment history key shows c/o status for October 2015.

I'm not sure if anyone has had any personal experience with this either as a buyer, realtor, or lender, but any help is appreciated.

Thank you!

[Anonymous]

If any of the data is inaccurate, you should dispute it and have it corrected prior to application.  The fact that you have $0 balances stands for something.  Have you tried writing goodwill letters to any of the creditors to see if they will remove the account from your reports?  There is success to be had there.

What are your scores now (mortgage scores, not 8 or FAKO or any others)? 

[Anonymous]

Thank you for your reply. 

I tried goodwill letters about a year ago, but I'm not adverse to sending more.

I have submitted several disputes with supporting documentation over the over the past two years. Experian deemed my last dispute as frivilious /previously addressed so this is my last hope. I wanted to app soon rather than start a new round of disputes. However, I did contact Macy's Executive Office / Office of the President to inform them of the error and unresolved disputes. My letter also stated my intent to sue if the issue is not resolved. I want to app for a mortgage and I don't want to sue but I don't have any choice if they won't fix the errors.

My mortgage scores as of two weeks ago were: Eq: 670, Ex: 667, and Tu: 677.  My current until is about 29%.

[Anonymous]

I'm not in a dissimilar position.  My medicals are suppsed to be removed and then I'll be attacking the process with similar scores (hopefully this week).  I'll let you know how the Desktop Underwriter treats me.  If your back end DTI is 29% you should be fine from what I hear on a 90-95% LTV Conventional.

[Anonymous]

Yes, please keep me posted on how your app process goes. I have to check my front/back end ratios again, but my back end is the problem due to my high student loans. I'm still in school so they are in deferment.  I think I'm going to pay down my cc debt to under 10% to see if that helps my mortgage scores. 

[Anonymous]

Woke up this AM and my medicals were gone from TU so my mid score shockingly ended up at 681.  Went ahead and sent it to the lender and just got the Desktop Underwriter Findings.  

APPROVE/ELIGIBLE!  Obviously this is just the beginning, but it's very exciting!  Hopefully UW goes smoothly.

For reference, DTI was 37%, loan amount $417K, 93%LTV.