I am in the process of buying my first house. I paid off alot of chargeoffs to qualify for a FHA mortgage. When I put my mortgage app in my scores ended up being 20-30 points less then what scores I get when I run my own credit. I just found this out now. The house is ready to close but I got rejected from the first lender. The scores they have me down for are 540, 575, & 605. Now the mortgage company has sent it out to a second lender who has had the file for a week and no response yet. The sellers attourneys got wind that the 1st lender rejected it and they are treatening to put the house back on the market by the end of this week if I don't get a commitence letter. And to make matters worse I need to move out by the end of the month. I just went from excited as I have ever been a week ago to the bottom of the barrel now. Has anyone have experience with FHA loans? Has anyone been rejected from the first lender but got one approved from another? I need advice please, don't know what else to do.
You can temporarily "pump up" your Equifax score. Go on EQ and put your negatives in dispute. This artificially raises the score. For the others, you may need to ask the lenders to remove. Dispute with TU and EX too. You will need about 30 - 45 days to see where you stand. There is no REALLY quick fix for this...
the same thing just happened to me. Got the preapproval, got the house ready, sellers move out, and 10 days before we close we are suddenly turned down. Now I am getting ridiculous offers with tons of points I could not possibly afford.
It's my understanding FHA does not go by credit scores and look back 2 years on credit. Could it be a pay off acount changed the last activity date that caused the problem.
Have you had any success disputing the foreclosure? It would seem that TU would be the best route to get it deleted. If there is ONE thing incorrect they will delete the TL. Charlie
According to the gov web site I read about 2 yrs ago (which means it may have changed), FHA does not grant a mortgage until the score is 620. For your sake, I hope I am wrong.
I just closed on my house in August with an FHA loan. I was told it is NOT score driven; however, my loan officer wanted to make sure my score was above 620 before we even proceeded with the loan! As for the 2 years of history, I have some 30-day lates within the last two years, but my lender (Countrywide) just asked for letters of explanation for everything, and my process went very smoothly. kjoe
hmm are my fiasco we are trying an 80/20 loan with countryside. I would love to get it because the 20% down is actually a line of credit and we can keep it open for 25 years. Pretty much it would be for $14600 so once it is paid we would always have that available for emergencies which is awesome. I am crossing my fingers now.
Rob said, "I am in the process of buying my first house. I paid off alot of chargeoffs to qualify for a FHA mortgage. When I put my mortgage app in my scores ended up being 20-30 points less then what scores I get when I run my own credit. I just found this out now. The house is ready to close but I got rejected from the first lender. The scores they have me down for are 540, 575, & 605. Now the mortgage company has sent it out to a second lender who has had the file for aweek and no response yet. The sellers attourneys got wind that the 1st lender rejected it and they are treatening to put the house back on the market by the end of this week if I don't get a commitence letter. And to make matters worse I need to move out by the end of the month. I just went from excited as I have ever been a week ago to the bottom of the barrel now." Just wanted to give this a bump as I'm intersted in the FHA process. Other people on here have posted that they got FHA loans with scores below 620, although I've heard it takes more work to get it done. Rob, how old were the charge-offs and how many did you actually have still showing on the reports? What are/were your SOs scores? Maybe you can get the loan based off of just their scores. Hopefully someone with more FHA exper. can weigh in on this...
I had chargeoffs from 98. I paid all of them within the last 6 months. My scores that I recieved directly from the CRAs were like 626, 628, 590. That was in July when I applied. I asked the guy at the mortgage company repeatedly if I would qualify and he told me no problem, that he has gotten people loans with scores around 520, 530. Now 2 months later and I am having trouble with the loan I find out that the scores he pulled were much lower then what the CRAs gave me. I was also told that the reason I didn't get the first one is because Sears is still showing 90+ days lates. On my credit file, it's says account sold - charge off. After I paid the CA, I made Sears report a 0 balance. But for some reason they are still adding 90+ day lates to the file every month. How can I be 90+ days late if I have no balance and the account was sold. I guess the lender wouldn't notice that they account was paid, and it was probably just enough to reject based on my scores. FHA does use scores, sort of. In the mess of this I told the mortgage guy that I had just checked my credit and my scores were 640+ on 2 CRA's and 590 on the other. He said that if he checked it and they were over 620 average (and as long as non credit info will qualify you, ratios, income, downpayment, etc) that it would be an automated approval. This is how I learned that the scores the CRAs give you are not the same as what the lenders see. On a side note TU score is HEAVILY influenced by available credit. I had checked my score at the beginning of the month and it was close to 650 and I has using only about 55% of my balance of my credit card. The new statement came in and I was using 88% and it dropped my score almost 40 points. Nothing else had changed on the report. I guess FHA uses scores to help speed up the process if you have good scores you get an automated approval, if you have terrible scores it will deliever an automated no, and if you are in the middle you get a "refer" in which a person has to review your file and make a decision. I am pretty sure I can get a FHA loan, but time is coming in to play. The close was supposed to be the beginning of Sept. but the septic had to be replaced and they took over a month just to pick a contractor. Then he can't come out until end of Sept or early Oct to put it in. Then by shear luck he gets a job cancelled and it's installed by last week. Now some agent for the seller freaks out because the loan isn't approved and makes a deadline to put it back on the market. I know that I will get financed given enough time but I think that my time will run out. The mortgage company is to blame partly. They waited until the last minute to send the loan out, I should have known of these problems a month ago. I'm still waiting to hear from the second lender but I reserve no hope. I have lost all confidence in the mortgage company. Thanks for all the comments.
What state are you in? Have you already paid for your appraisal and other inspections? Did the lender give you specific reasons why you were turned down? Maybe your debt to income ratio is too high. Have you been late on your rent in the past 12 months? It is my understanding that if you have, you will not be eligible for an FHA loan. Also, per the charge offs that you've paid, were any of them charge-off or placed for collections within the past 6-12 months? If so, there is a good chance that you would be disqualified because of this too. FHA is pretty forgiving, but they do not want you to have incurred negative credit within the past 12 months. Something else to consider: Are you sure that the CRA's didn't re-age your paid chargeoffs? This could be a possibility. Whatever happens, it's unethical for a loan officer to feed you B.S. for a month when they have all your vitals and your credit report. If you were honest with them about your debts and income, they should have been able to tell you that you could be approved subject to certain conditions (like having to pay off old chargeoffs). I had a loan officer who was awsesome! She went out of her way to help me out and straighten out my credit enought to purchase my home. When my tri-merged report was done, I looked so much better! She also used a trick called rapid rescoring. Hope this helps alittle. Sirrowan
Your scores are high enough to go STATED. Ask your loan officer about this. Also, get a copy of your tri-merged report and take it around to other loan officers. The more lenders the broker/loan officer works with the better your chance of getting approved. What state are you in? You can also go to www.nationalmortgagenews.com --- Grapevine and post your scores, debt to income ratio (ask your loan officer), amoutn of house, income etc and ask them if any of them can close that loan for you within 10 days.
UPDATE I got an approval letter this morning. It has some conditions though. The only one that I can't meet is that they want to see 12 months returned rent checks. They already have the Renter Verification Form but they want the checks too. My landlord refused to accept personal checks, only cash or money orders. I paid 10 out of 12 months with cash. I have reciepts from the landlord for all of them. The mortgage company says to use all of the reciepts and write a letter explaining that the landlord would only take cash. Any experience with this, do you think it will satisfy the lender? Thanks
Re: UPDATE Did you keep copies of the money orders, or at least the stubs? If so, the money order issuer can provide payment posting info just as a bank would for a check.
Re: UPDATE I kept the reciepts, but I only paid with money orders twice and they are from the post office. The rest of the payments I only have written receipts from the landlord.
