First time poster, long time lurker. I have read your great FAQs but I'm afraid that I don't have time to send out the necessary letters. Here is the abbreviated version of my dilemma: I am buying a new house. I have crappy credit (580 score) from making mistakes 5 years ago. The lender wants me to rectify my past bad debts which total about $600 before they will approve my loan. I need to pay these by Tuesday of next week (today is Wednesday) and show proof that all is square. Should I just pay them and get them to fax me a letter that the bad debt was made good or is this a mistake? Please don't flame if I've missed something in an FAQ that explains this. I will be eternally grateful if anyone can tell me which path is the best for me.
I would say that since you don't have much time you need to take care of these. Are they with the OC or are they with a CA? Be very careful not to let them know that you are in the process of getting a mortgage because the $$$ amounts will likely go way up. Hopefully you can deal with the OC. I would get money orders (the ones with a carbon copy like what the Post Office uses) make each money order out and send the payments via CMRRR referencing the money order number in the letter. You can make a copy of the money order receipt and a copy of the letter w/post office receipt to your mortgage person which should help to prove that they are paid. Also in your letter tell them that you want a letter in return stating the account is close & paid in full. Good luck! paw67
Talk to your mortgage broker about bringing cashiers checks made out to the CAs at closing. That way you won't have to wait for proof they were paid.
if I may add my two cents worth, having worked as a real estate paralegal, you should be able to have the creditors fax you letters stating that X-amount will settle account number xxxx in full and that they will follow up with updating ccredit bureaus upon receipt of payment, and then definitely get cashier's check(s) - much easier to trace history on - and have them at closing - the attorney's office can disburse with the rest of the funds - that way the attorney can show the lender it was done, and there should be no questions and things should proceed smoothly - good luck
there is a 24 hour repair service that I have heard of... I will remember the name shortly.... anyone... (for situations like this)
just be careful with these services - I have heard that brokers will often use them to satisfy a lender, but they can get pretty expensive - if the amount in question is only $600, I would ck to see if the lender would accept it being done with the closing attorney overseeing it as a closing requirement before spending a few hundred bucks to re-score - just a thought
Thanks so much for the replies! I can't wait to pay these off at closing as they won't even approve me for the mortgage loan until these things are taken care of. We don't close until December! Alright, so I'll go ahead and just pay these off with money orders. But shouldn't I at least attempt to get them to take it off my CR? Time is of the essence and I don't know if I can wait for them to send me an agreement via mail so it might be a lost cause. Last question, the lender wants me to give them letters of explanation for my numerous lapses in character. Where can I find good examples of what and what not to do? Does anybody know what makes an underwriter go ahead and approve the loan based on this letter? Geez, I feel like I'm applying to college and I have to send in an essay or something! Help on this is much needed. Thanks in advance!
Very simply Regretful, POSTPONE THE PURCHASE OF THIS HOUSE. Go study this thread: http://consumers.creditnet.com/stra...=&threadid=39313&highlight=rule+AND+of+AND+72
I did read your thread a while ago. It's great stuff thank you! I really do wish I could postpone this loan. We got caught in the mad rush to buy a house before the rates go up and had to put down $500 in earnest money and signed a contract. Of course hindsight is 20/20 so I'm stuck here trying to figure out mess. I've been searching the boards for help regarding the "letter of explanation" thing but unless I'm being a complete idiot I can't find a darn thing.
1) I know you must be excited to buy a house (I know *I* would be!) But, is there any way out? Could you get your $500 back if the financing is not approved? (A typical contract clause). 2) In the letter of explanation, I'd be repentant. Explain that you understand what you did wrong, and that you've mended your ways. Give some reasons why you goofed up before with some examples of life challenges and then emphasize what's changed. Are you following a budget now? Employment changes? Health changes, so less medical expense? Attitude change. Is there anything NOT on your report that you can mention, such as timely utility or rent payments? If you could give a few details of what REALLY happened, we might be able to help a bit more with crafting something. In my case, I wrote such a goodwill letter. The previous bank STARTED a foreclosure process that was not completed since I sold the house first. So I quoted the Webster's dictionary stating that I had not technically been legally separated from my house, as the process was started but not completed. It just depends on WHAT you bad tradelines are showing, what timeperiod and what the real reasons were. It worked.
