I am totally exasperated about the whole FHA process. I spoke with a lender and basically have to give my firstborn to get a home. Any suggestions to the following? 1) I have a subprime car loan (big mistake) and they have "not received" my payment on 4 occasions this past year. I have proof that I stopped payment on the checks and wired the money that same day. Lender says that won't fly, I have to get them removed. They won't remove and I cannot believe if that is the only thing I cannot get rectified that would stop me from getting a loan. 2) I have several charged-off accounts. He says date of last activity doesn't matter. He says what matters is the last time they reported the account. Two of these charge-off date of last activity were in 1995, yet they reported to the credit bureau on their updates a couple of months ago. I know that is not when they were charged off. What can I do here? 3) I have to pay any and all med collections. Is this normal? I thought FHA didn't care about med collections under $100. 4) I only have two open tradelines that are current so he said that won't work. He didn't give me much more to go on here. I have excellent rental history. I have an automobile that will be paid off next month that was owner financed. Might those two help? 5) I told him a couple of the debts were not correct and they were being disputed. He said they had to be paid. Won't they take a re-look if I have a creditor remove the debt? I told him I would pay the charge-offs if I had to, although I thought anything over two years didn't matter. However, I need a loan commitment letter by the end of May. I asked him if I worked out a payment plan and got these paid before closing at the end of June could he please give me a loan commitment letter with those conditions? He said he doubted it. Is it just me or does it feel like they just don't want to help? I am not asking for the loan by the end of May because I know I have to do my part, but can't anyone give a conditional commitment letter??? This stinks! Thanks for any insight or referrals! Also, aren't there ANY subprime lenders who charge big interest rates and give low down payments? SM
<<<Is it just me or does it feel like they just don't want to help? I am not asking for the loan by the end of May because I know I have to do my part, but can't anyone give a conditional commitment letter??? This stinks! >>> I think he is helping you by telling you what to do. You just arent' seeing it because it's not what you wanted he hear. No, I have never heard of conditional pre-approvals. Do the things he asked and see where that gets you. Pay off all the medical bills. Open up a few more lines of credit
My husband & I have been going through this same thing for the past few months. Every lender tells us something different as to why we can't get an FHA loan. Even though we fit the guidelines. They don't look at FICO scores. Yet mine is a 751, but my husbands is 568. one wants his score up to 600. We have established ten types of credit. Only one is reportable. I have letters from five of them. Still another lender says need more reportable lines. How are you supposed to do that if you don't want &/or can't get a credit card. My husband gets turned down cause of his scores. Even though I have no reporting credit lines on my CR's I get turned down cause they say to much outstanding debt. We had a dishcarged ch 13 BK 12/99. One says that's ok, another says they want us to wait for the 18 month time period, others 2 years. (Fha on a ch 13 said 1 yr, 2 for ch 7's from discharge.) Our rental aggreement is up the last of Oct. We were hoping to build. Now we're so disqusted by all this we basically have given up. Don't know what we'll do. Been offered a 80% LTV. The loan may be between 80,00 to 100,00. If we had 20% to put down we wouldn't be trying to go FHA. Our income qualifys us for a $130,00 home. None of it makes sense. Of course we have also been offerd credit repair service for $582.00. Which I am sure if we could get off the 22 incorrectaly reported items our scores would go up. I am so exhausted at this time I don't have the energy to tackle the CRA's yet. Thanks for letting me vent. Hope things turn out better for you. Becky
I am going through FHA right now, my husband had an unpaid collection from "95", this HAD to be paid, so we paid it. Yes FHA doesn't focus on scores and they want a good 2 year payment history however if the are unpaid debts this most likely need to be paid regardless of when they occured. Open collections have to be paid. I have heard that medical collections don't look as bad, but still if open they have to be paid. I would assume the lender ran your reports to have your info and score, if so asked them for a copy of your merged reports, then call around and talk with other lenders and give them a copy of your merged report and ask them for a GFE based on that report don't let them run another one if they insist hang up and call someone else , find one you like and they may offer some different advice. if you don't like this lender you may shop around with other lenders until you find one that really wants to help you. I did this awhile back I had a merged report ran and didn't care for the lender I requested my merged report and send that to others lenders the evalulated me on that report and gave me their thoughts on loan approval. I am sure Kelly will tell you how different lenders will view you and work with you, she almost got robbed at rates but found another lender that offered her a great rate with same credit history. Also try to find a lender who does in house underwriting they tend to know what exactly the underwriters will focus on and what can ba explained.
FHA is pretty strict on the no new negs in past two years. If you are in a hurry, try a subprime lender, work on credit, and refinance in a year This was a big surprise to me as well. We almost screwed ourselves because of disputes. None of hubby's collection accounts were actively reporting. However, when disputes were made, and the accounts were verified, a new recent reporting entry was made. We were able to overcome this, so don't give up! It's not an FHA guideline, it's their underwriter's discretion. We did not have to pay hubby's medical collections. HOWEVER, we were putting 10% down. It just balanced out Anything positive will help. Hubby had 4 open accounts with no negs. A couple sub-prime cards will help. Obviously, not by the end of this month though. Yes, it will help. If your lender won't "re-look" go to a different one. If removed, they won't even see it. Move on to a different lender. You need somebody who is willing to take more risks. We heard no several times b4 the two yes's If you are in need of a commitment letter by the end of the month. I'd recommend a subprime lender. One that doesn't have pre-payment penalties so that you can refinance in a year or so. But be careful. If you use a broker, find out their fee's upfront. I was sooooo naive I almost got screwed big time. Your biggest obstacle seems to be your recent lates. Have you disputed those? I know it stinks, however your lender did u a big favor by telling you exaclty what stands in your way. In a years time, I only heard no! They never told me why (AND I ASKED SEVERAL TIMES) They wouldn't help me past the denial letter. U know the one that says, we wont approve because you have negative credit. Well, duh! No specifics at all try www.alphamortgageusa.com I know they do subprime w/o prepament penalties and low downpayments. One real estate agent recommended them to us if our FHA lender didn't approve. check them out. They overnighted the loan app to me. Good luck
