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Tough Choice to make, Help?

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Jreymiller
Valued Member

Tough Choice to make, Help?

So. I went to be pre-approved for a mortgage and they said before my fiancé can be added on he needs to address an account/repo from 2012 for 6,000
The account stopped reporting in 2014 and says closed.
WHAT SHOULD WE DO!?
Should we offer to pay part of the amount? Will that pop up as 5 years of late payments?
Do we ask them to remove it?
Will we never be able to be approved with this debt?

Any advice would be wonderful. I just don’t know how to go about this.
3 REPLIES 3
dynamicvb
Valued Contributor

Re: Tough Choice to make, Help?

When in 2012? It’s about to fall off and not sure of your state but it’s likely outside of the SOL. If it was me, I would just wait on the mortgage if I could not afford to pay. Or is there a possibility of you just doing the mortgage alone? I did that last year since my wife had worse baddies than I did so I left her off the mortgage and just added her name to the deed at closing.

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Message 2 of 4
RobertEG
Legendary Contributor

Re: Tough Choice to make, Help?

He apparently has an unpaid debt that the mortgage lendor is aware of and is requiring to be paid prior to approval of a loan.

That is appaarently their underwriting requirment.

 

Neither expiration of SOL nor exclusion of the account and derogs from his credit report discharges the debt.

Once they are aware of the unpaid, delinquent debt, they can require its payment prior to any loan approval.

While many creditors wont be concerned with debt that is now outside of SOL, they have the right to do so.

 

Once a period of 7 years plus 180 days from the date of first delinquency has expired, the account will become excluded from his credit report.   That exclusion will occur regardless of whether the debt is paid or otherwise discharged.

 

After the exclusion date, it will not be shown in his credit report, and no derogs can be added.

 

If you choose not to pay the debt and wait for credit report exclusion to shield any possible reporting of the delinquent debt, that may or may not result in another lendor not being able to consider that delinquent debt.

They wont become aware of it by simply pulling his credit report, but can request a full listing of any unpaid, delinquent debt as part of their underwriting process.  That would result in his obligation to disclose the debt, regardless of credit report exclusion.

 

Whether it will continue to be an issue if it remains unpaid depends upon the underwritng process used by the prospective lendor.

However, if you do pay, then no issue of disclosure of an unpaid debt would remain.

Message 3 of 4
Anonymous
Not applicable

Re: Tough Choice to make, Help?

I've never had a lender request a statement regarding unpaid debts. I've only had two different mortgages though. My BF just went through the mortgage refinance process and he has an old account that isnt reporting and they didnt ask for a statement either so they didn't know about the old debt.
Maybe you do like was suggested and just put her on the deed or wait till it falls off credit and then try again with another lender. Idk if this lender doing that means other lenders will see their reason for denial or not.

Just putting that out there.
Message 4 of 4
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