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Questions regarding what i was told by loan officer

Jason4string
Regular Contributor

Questions regarding what i was told by loan officer

So knowing that we were not going to be approved , I monitor the fico mortgage scores monthly, we went to see a mortgage loan officer today, in the hopes that they would be able to guide us in what to do in order to qualify .  We have been working on credit repair for three years, and have paid off huge amounts of credit card debt etc in order to raise the score.  Fico 8s are looking decent at 640 on average, and on the rise slowly now that utilization is at 2%.  But the mortgage scores middle score is 568 so obviously we need help.   I brought a copy of our credit report from last week and scores in teh hopes of avoiding an inquiry but they said they had to run it themselves to put it in their simulator.  Otherwise, they thought our income looked good, and they even felt our dti was okay for the size house we wish to purchase,  despite the large amount of student loans.   We went ahead and let them run the credit - which was exactly what I had score wise a well.  And then she started running her simulators.  Low and behold she said there was literlaly no scenario she could run that would move that mortgage score - at all - except if we wait 12 months, then it goes up to 670 provided we keep paying our bills and keep the cards down. 

 

Here's the thing, when I use the fico simulator on my fico the most improvement I get aging the credit report 12 months is 20 points.  (granted that is on the fico 8 score on this site)  So my question is - do mortgage brokers really have access to a simulator that uses the mortgage scores specifically?  IS it possible that my mortgage score would increase to being higher then  my fico 8 ?   Or is this loan officer full of it and doesn't know what she is doing?   I literally cried in the office, I don't have 12 months to wait, and I especially don't have 12 months to wait and have her turn out ot have been making stuff up. 

13 REPLIES 13
rwillette31
New Visitor

Re: Questions regarding what i was told by loan officer

Yes your mortgage broker should have their own simulator. I am in the process of closing on the purchase of our home on aug 5th. I began the process in early April with high 500 scores. Since that time he ran a simulation paying off a charge off I had. In that scenario it showed my scores jumping over 35 pats getting me to the 630 middle I needed. I paid off the account and they did a rapid rescore and sure enough their simulator was spot on. I then had him run another simulation paying off an old repo and his simulator showed my scores jumping just over 660 which got me a better rate. I settled the account with my old bank and they did a rapid rescore again and the new scores came back almost identical to what the brokers simulator said it would. So the short of it is, that yes their rescore predictors, at least from my experience seem to be pretty spot on.
Message 2 of 14
jmd1
Member

Re: Questions regarding what i was told by loan officer

I am in no way a mortgage expert, but I am in the process of buying a house, and believe I can answer your questions. So, they use the Fico home score. My fico home score dropped many points when my LO and the bank, requested I remove an dispute status on my credit report. This resulted in my medium fico homescore dropping to 611, 9 points shy of what I needed it to be. He used a simulator and made me pay 209 to an old chargeoff. The simulator told him it would bring me to a 649. They he used a service called rapid rescore. With rapid rescore, they update the credit reports in 3-5 days, instead of having to wait for the standard 30 plus days. He told me it was very accurate, the simulator. I also posted in here, and I was told by other loan officers (via this forum) the simulator was very accurate too, and they have had much success with it. 

 

Question, why not go FHA but with a bank without overlays? The problem with me now is I am with a bank with overlays. If this rescore doesn't work, I will withdraw and go to a bank without overlays. FHA loan with a bank without overlays is 580 credit score needed. If you're in a rush, this is what I would suggest.  

 

Good luck to you.  

Message 3 of 14
jmd1
Member

Re: Questions regarding what i was told by loan officer

Thank you so much for posting this. You give me such hope!  I am in the same situation. Once I removed dispute comments my EQ and TU scores tanked and brought them down to a 605/611. He too used the simulator and we just did the rapid rescore on Monday, and it said it will bring me up to a 646. It too was a chargeoff he asked me to pay, but he told me not to pay it off, but to pay it down to get it under the 143% utilization. If you don't mind me asking, how long did your rapid rescore take? I am so beyond nervous. I am 9 points shy of my final approval! Congratulations on your home! 

Message 4 of 14
Jason4string
Regular Contributor

Re: Questions regarding what i was told by loan officer


@rwillette31 wrote:
Yes your mortgage broker should have their own simulator. I am in the process of closing on the purchase of our home on aug 5th. I began the process in early April with high 500 scores. Since that time he ran a simulation paying off a charge off I had. In that scenario it showed my scores jumping over 35 pats getting me to the 630 middle I needed. I paid off the account and they did a rapid rescore and sure enough their simulator was spot on. I then had him run another simulation paying off an old repo and his simulator showed my scores jumping just over 660 which got me a better rate. I settled the account with my old bank and they did a rapid rescore again and the new scores came back almost identical to what the brokers simulator said it would. So the short of it is, that yes their rescore predictors, at least from my experience seem to be pretty spot on.

Thanks for the reply.  How disheartening to know that while her simulator works, she couldnt find any scenario to raise the score at all except to wait a year - meanwhile I live in a neighborhood where I have literaly had to duck in my home because of drive bys.  Another year here seems like a prison sentence.   

 

Follow up question - do you know if one of the scenarios they can simulate involves having a collections account removed?  I see you said paying off a charge off was able to help in your situation.  Wondering if perhaps they dont have this as an option which would mean there was still some hope for me if I could get these medical collections removed with a pay for delete. 

Message 5 of 14
rwillette31
New Visitor

Re: Questions regarding what i was told by loan officer

While I can't speak to your loan officer, my LO was able to run a "collection" simulator seeing what would happen if the accout was either paid off/settkled or deleted - that was the case with the car repo as it was showing up as a "collection account".  There was not a huge difference as to whether the account was paid off/settled or if it was just out right deleted, but he was able to run scenario's regarding the impact of the collection account and what my score would do if it was removed.  Sometimes just working with the right LO can make a world of difference.  I was looking at doing a Jumbo Loan and only had 10% down.  I spoke with at least 5 or 6 different brokers and they all had a different mix of portfolio products, i.e. some required 680 min. to get the same loan as my current LO was able to get me at a 630.  

 

Also, not sure if you have or are working with a credit repair agency.  Some of those places are complete rip-offs but I was able to find one that was very honest and did a great job getting a bunch of 4-5 year old collections and late pays completely deleted which dramatically helped in increasing my scores as well.  I didn't go to "paying off" those last couple of accounts until I got to a point where the credit agency couldn't help getting anything else deleted, but I will say they were able to knock off 3-4 accounts per bureau.  I probably spent $5-600 with them and would definatley think about that option if you don't want to wait out the 12 months. 

 

 

 

Message 6 of 14
Jason4string
Regular Contributor

Re: Questions regarding what i was told by loan officer


@rwillette31 wrote:

While I can't speak to your loan officer, my LO was able to run a "collection" simulator seeing what would happen if the accout was either paid off/settkled or deleted - that was the case with the car repo as it was showing up as a "collection account".  There was not a huge difference as to whether the account was paid off/settled or if it was just out right deleted, but he was able to run scenario's regarding the impact of the collection account and what my score would do if it was removed.  Sometimes just working with the right LO can make a world of difference.  I was looking at doing a Jumbo Loan and only had 10% down.  I spoke with at least 5 or 6 different brokers and they all had a different mix of portfolio products, i.e. some required 680 min. to get the same loan as my current LO was able to get me at a 630.  

 

Also, not sure if you have or are working with a credit repair agency.  Some of those places are complete rip-offs but I was able to find one that was very honest and did a great job getting a bunch of 4-5 year old collections and late pays completely deleted which dramatically helped in increasing my scores as well.  I didn't go to "paying off" those last couple of accounts until I got to a point where the credit agency couldn't help getting anything else deleted, but I will say they were able to knock off 3-4 accounts per bureau.  I probably spent $5-600 with them and would definatley think about that option if you don't want to wait out the 12 months. 

 

 

 


Thanks, I have been doing it myself for the last several years with pretty good results. MY fico 8 is up 120 points.  Sadly my mortgage fico scores are up very little.   I would like to think if I can get these collections deleted it would HAVE to increase the score, but I am wondering if its a scenario she ran in her attempts when she came up with "nothing" - it just seems strange to  me that there is literally NOTHING that could raise the score. 

Message 7 of 14
NC_Mtg_Loaner
Valued Contributor

Re: Questions regarding what i was told by loan officer

What type of accounts do you have open and actively reporting your timely payments to all 3 bureaus?

 

Student loans can often be the anchor that continues to drag one's score among the ocean floor leaving you with the 'dregs' of society, so we might need some more clear information about the activity and status of these accounts relative to your open accounts and your collections actually.

 

What if Simulators can definitely be fickle, but truly it is the algorithms generating your score that are fickle which is why most LOs will focus on the consumer practicing better behaviors when it comes to managing credit that will help more in both the short term and the long run.

 

 

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 8 of 14
Jason4string
Regular Contributor

Re: Questions regarding what i was told by loan officer


@NC_Mtg_Loaner wrote:

What type of accounts do you have open and actively reporting your timely payments to all 3 bureaus?

 

Student loans can often be the anchor that continues to drag one's score among the ocean floor leaving you with the 'dregs' of society, so we might need some more clear information about the activity and status of these accounts relative to your open accounts and your collections actually.

 

What if Simulators can definitely be fickle, but truly it is the algorithms generating your score that are fickle which is why most LOs will focus on the consumer practicing better behaviors when it comes to managing credit that will help more in both the short term and the long run.

 

 


So this is what I have reporting on my report for open accounts:

 

Current open accounts :

Car Loan - opened in 3/15 - never a late payment.  owes 7,856 of a high balance of 17, 538, joint account with my wife

Kohls Credit card - opened 10/15 never a late payment, balance $13 , credit limit 300

Target Credit Card - opened 12/16 balance 0, credit limit 300, never a late payment

Meijer Credit Card - opened 12/16 , balance 0 credit limit 1580, never a late payment

Capital One - opened 10/16, balance $9, credit limit 750 never a late payment

Cabelas Captial one card - opened in 1/2000, credit limit 21,500 current balance $46 , never a late payment - I am an authorized user on this account since 2014.

 

Additionally I have a LOT of student loans open, there are 12 seperate accounts ranging in age from the newest in 1/14 to 9/2000.  They are all in repayment on income based repayment, of those student loans the five with nelnet - report a single 90 day late payment in 11/17. ITs not even factual the loans were in forbearance to cover that time period.  However I have, so far gone 5 rounds with nelnet, and the cra's trying to get it corrected with no luck.  They report as current since then and before that.  

 

I also have an old closed auto loan that was closed in 2/14, it was open before that for five years with zero late payments and paid in full. 

 

There is a charge off from credit one in 3/2013. It has been paid in full for four years last updated 5/15. 

 

I also have five medical collections totalling $1100 - the most recent in 2018 and the rest from 2013-2015.

 

No leins or judgements etc. 

Message 9 of 14
JVille
Valued Contributor

Re: Questions regarding what i was told by loan officer

Why don’t you pay the Medical Collections off and let your scores go up. You report a total of $1100.00 in Med Collects??? Is this correct?
Message 10 of 14
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