I have recently went to mortgage broker firm looking into possibly getting a home loan. After pulling the credit report I learned that although my middle score was good enough to get a FHA loan that no one will make a loan for me with collections on my account. Can anyone verify that? Reason I am asking is because this mortgage broker firm also has a " credit repair" firm in same office. Which currently I have ovation credit doing the disputing for me on my credit reports (with 0 success I may add). The bad thing is that after contacting all 3 CA's on my CR they all have informed me that it is illegal to delete for pay full or otherwise. As I told them after that, then what incentive do I have to pay at all. They have done the damage already.
Most mortgage creditors will not give you a mortgage if you have unpaid collections. If you pay them they may consider it. Did they say you can't have any collections or you can't have any UNPAID collections?
It's worth asking around on. When I got my mortgage I had a couple of old collections on record. One was roughly $5k, and I think the other one was an old medical bill, relatively small. I went through a local credit union, where I had my checking account. They asked for a letter explaining the collections, but gave me no trouble other than that. (Both of the collections were for disputed charges for services I refused to pay for. Both were old enough they'd fall off very soon. One actually should have fallen off before that, but the CA kept verifying the wrong DOLA with the CB. The difference was less than a year, and didn't really affect me, so I never bothered taking it any further.)
They said collection accounts on my CR. Also the accounts were "In Dispute" on the credit report and they told my that the verbage needed to be changed because a loan company will not do a loan with disputes on the CR. Funny I can go finance a $50k car with no problem but cant get a 80k home loan. Ahh the American Dream,,,,,then I woke up.
Like Hedwig said, the main problem is that they're probably "unpaid" collections. That looks really bad to a lender. If you pay the collections off and the dispute notations are removed, most mortgage lenders will work with you as long as your FICO scores are good enough to qualify for whatever loan you're seeking to obtain. Oh, and I wouldn't utilize the broker's "credit repair" services. They can't do anything you can't easily do for free, and you'll likely have more success as well.
