In this thread, I briefly alluded to the letter of explanation Wells Fargo Home Mortgage is requesting from me regarding my past derogs before the loan can proceed. I know this is pretty much standard procedure, but my question is this: what if they don't like my reasons? I didn't have any medical condition; didn't lose my job; no divorce; wasn't the victim of identity theft...no other catastrophic or life-changing events precipitated the delinquencies in question. Just stupidity and irresponsibility, in a nutshell. I feel like the only guilty man in prison. So I guess there are two questions: 1) what if they don't like my reasons; and 2) how can I word the above paragraph in a way that would reflect my sincere and near-fanatical credit turnaround that began over a year ago? Thanks, wajaba
Are you in contact with your lender/broker on a regular basis?? Sometimes they will help you write a nice letter b/c they know what the underwriters are looking or wanting to hear.
Well, I can say from my recent experiences that they don't seem to reject any letters, as long as you give an honest answer. -zantar
Momof3, Yeah, the only advice she had for me was to "just be honest, Mr. wajaba." You kinda had to hear the way she said this: it sounded like an intervention, or something. Oh well...I faxed my honest letter to her a little while ago; we'll see if it's a show-stopper or not soon enough. Thanks, wajaba
zantar (cool name, by the way), I certainly hope I'm not the first! We'll see if the underwriters appreciate my candor... wajaba
I think you will be fine. I don't think underwriters like to see, I couldn't hold a job, I can't manage money to save my life, or I am a shopaholic LOL.
They should be able to understand that we all were not raised by parents that read us Money magazine and the Wall St Journal at bedtime. Some of us were immature when it came to money matters, until we finally grew up and faced the music.
I had to send out a letter this week as well. Know how you feel. If I were to truely be honest, the letter would read "The reason you are noticing all these derogs is because the CRA's keep verifying them " Sorry, bad joke - I'm in the IT business so I just explained that the market was unstable and they accepted it. I think they just want something for their records... GT
I can't really give any advice but I will tell you what happened with me last year. I bought a house (thank GOD!!) and had to write an explanation as to why I had derogatory credit. I had 4 chargeoffs and 3 collections. Three chargeoffs and 1 collection was paid in 2000 therefore I had to pay the others last year per my loan officer. I was honest in my letter and I was told upfront that they read it and would proof read it before submitting it with my app. I didn't have to edit it any. In fact I did include, at the end, that having a bad credit file felt like a criminal record-it never goes away(not that I have a criminal record). I was so embarrassed but I had to do it. Like I said I got the house and I was so happy and proud of myself. As should anyone else who does the same. I think that if I could do it anyone can. Good luck with the process. HeatherB
Heather.... I know you said you bought a house last year (2001) and you had charge offs and collections paid in 2000 (where they old - from 2000 or older). As a matter of fact, where ANY of the collections/charge offs less than a year old?
Good question. I wonder if the age of the charge-off or collection account will affect whether the mortgage company will approve the loan, or do they simply want to see the derog. account paid?
I hope I answer correctly. Upon reviewing my CR the chargeoffs had a DLA of 1996 & 1997, one collection was just reported in 5/01 and the other had a DLA of 5/00. I also had another collection that they removed when I paid-they were a nice one huh? The original creditor's DLA for that charge is 12/98-yes it's still on my CR. I did have to pay these off in order to get approved. However, I have 5 CC accounts now. 2 closed (one states by consumer and other states by credit grantor) and yes they have previous status listed. The other three are between 16 mo -3years old. I have an FHA loan-don't know if there is a max. income limit-and had to do a buy down. This was because of my lower income. I am currently disputing on my CR in hopes to get a good rate when I refinance. I locked in at 8%(1st year pymt based at 6%,2nd at 7%,3rd-30 at 8%). I didn't have a choice about that, as I wanted to get a house so bad and with my credit I feel fortunate to have done so. As I stated above, if I can do it anyone can. In case you are wondering my notes are $756.(PMI, taxes and insurance are included). Hope this answers your question. I think that it's great that people are so generous and helpful with advice, opinions, etc. Goes to show you that there are caring, decent people in the world. Good luck in your accomplishments!!! HeatherB
