Struggling to find a mortgage

[Anonymous]

We have been trying for about 8-months now. When we started, we had a pre-approval and got denied financing on a home-due to the home conditions itself. Shortly after- we were SLAMMED with collections from a few years prior. I am working on those collections, and feel I can make a good portfolio in a few months, but I am passing MANY great houses that we have fallen for! We are wanting to move soon and found a home, but the middle fico is still too low 617

WE NEED ADVICE FOR A MORTGAGE BROKER WHO CAN 'GET IT DONE'

our situation

• BK about 5-years ago, with 1-judgement showing outside BK - struggling to get that one changed
• 2-collections still showing up on report since BK (after we applied for the mortgage) - one is an electric bill from 2-yrs ago, and another verizon 2-years ago both happening when we moved and had address forwarding problems.
• CREDIT SCORES: EFX: 617, TRU 590, XPN 650 
• I have spoken to SEVERAL loan officers who do not want to put the package together mostly due to the 617 middle score. We have done EVERYTHING to get the score up via credit card paydowns for about 4-months now. I have just this week had 2- collection accounts deleted and not sure how that may change my score this next cycle.

WHO SHOULD I CONTACT now for a mortgage? Any advice would be greatly appreciated.

[ShanetheMortgageMan]

With FHA financing most lenders are looking for a 640 score, recently quite a few that used to go down to a 620 have changed it to a 640.  There are still a handful that'll go down to a 620 and even a few that'll go down to a 600.  Since you said you expect your scores to increase from the 2 collections that recently fell off, I definitely think you should wait until the next cycle before getting your credit checked.  If those collections were impacting your score, your EFX score is likely to get over the 620 hump and you'd have more lenders your score would be eligible with.

These two post-BK collections you said are from 2 years ago... were they put on credit 2 years ago?  Or were they from 2 years ago, and just recently were sold to collections?

[Anonymous]

You have 2 issues that are going to be tough it not impossible to get by.

1 is the 617 score.  Most lenders are moving up to 640 anyways, so even 620 is not a golden ticket.  Getting it up to 620 will not guarantee the loan.

2nd, and probably a bigger issue (as you can get your score up in a little time) is any lates post BK is a deal killer when it gets to underwriting.  A judgement and multiple collecitons post BK will kill any loan period.  You are probably stuck waiting until you get all of them either removed, or you can show at least 2 years without and negative activity on your credit.  Even with good credit, they want a full year of clean credit.  With a past BK, they want zero negatives. at least they will want to see 2 full years of clean history with no lates or collections..

Right now, you are going to have to deal with that stuff prior to working on a home loan.  Trying right now is only going to cause you inquiries and a further score drop from them. 

[Anonymous]

Thanks Mickie: that is exactly what I have thought as well.  I need to roll-up my sleeves and get to work.. goal will be spring for a mortgage- I have 4-months or so to make some progress!

[Anonymous]

Also, so you know, the post BK lates are porbably more what is scaring LOs from talking to you but the low score gives them an easy way to put you off.  If they were really doing 620 loans still and your midscore was at 617, they would talk to you and try to help you get your score up.  So either they know the post BK lates will kill you or they are only doing 640 loans already.

Good luck with it.