Paid Collections Blocking 100% LTV On 713 And 651 Middle Score Credit?
I have a middle score of 713 and I am the primary wage earner.
My wife has a middle score of 651 but 5 paid collections from 4 and 5 years ago.
We are trying to Refi our primary residence to use the equity for some further investing but we are being told because of the 5 negative marks on my wifes credit....we can't qualify for an A paper loan??? Shouldn't the fact that,
1. They are old collections
2. Our credit isn't bad at all
3. Our debt to income is great
4. We haven't had a late mortgage payment(or any for that matter) since we purchased our house in 2002
outweigh the fact that my wife couldn't pay some medical bills when she was a single mother in 1999 and 2000?
Any suggestions would be appreciated!
[ Edited by mrzog34 on Date 04/01/2004 ]
If I were you I would try to see if you debt ratio without your wife's income. Usually paid collections don't affect "A" paper.
Lori
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Agree w/ Tinman. Try get a loan on your own, 651 isn't exactly A paper.
No offense to the other post, but I disagree. A mid score of 651 is A paper along as your DTI and compensating factors add up. The only aspect of the scenario that is giving you trouble (in my humble opinion) is the LTV. You mentioned DTI, so I’m presuming that the loan scenario is not stated income. With the information you provided, I cannot see any reason that you should be bumped to a higher rate. I’m assuming that you don’t have any derogatory debt. You actually know your credit score therefore you can shop for loans without having your credit pulled every time. This is to your advantage.
I recommend one of the four:
• Do not use spouse’s income
• Research your options with other brokers (some banks have tougher guidelines)
• Attempt to locate a portfolio lender with 100% retention (lender services and holds note, doesn’t sell it). Their underwriting guidelines are usually based on common sense as opposed to prepping the loan to be sold. Lenders that sell the mortgage don’t want to be holding the bag. Therefore, they are very strict.
• Find a broker that manually underwrites the loan (with automatic underwriting some silly things tend to make the loan a refer status).
Hope I helped good luck!
Hi, I had two collections that were paid off and it was stopping me too. I disputed them online and called the agencys where they were paid and went up the chain of command. It took 7 weeks but they did take them off. If they are already paid. BE A PEST. Its not worth there time.
Good Luck
Quote:
On 2004-04-03 16:42, swagman wrote:
No offense to the other post, but I disagree. A mid score of 651 is A paper along as your DTI and compensating factors add up. The only aspect of the scenario that is giving you trouble (in my humble opinion) is the LTV. You mentioned DTI, so I’m presuming that the loan scenario is not stated income. With the information you provided, I cannot see any reason that you should be bumped to a higher rate. I’m assuming that you don’t have any derogatory debt. You actually know your credit score therefore you can shop for loans without having your credit pulled every time. This is to your advantage.
I recommend one of the four:
• Do not use spouse’s income
• Research your options with other brokers (some banks have tougher guidelines)
• Attempt to locate a portfolio lender with 100% retention (lender services and holds note, doesn’t sell it). Their underwriting guidelines are usually based on common sense as opposed to prepping the loan to be sold. Lenders that sell the mortgage don’t want to be holding the bag. Therefore, they are very strict.
• Find a broker that manually underwrites the loan (with automatic underwriting some silly things tend to make the loan a refer status).
Hope I helped good luck!
651 is a paper, but it is not 100% LTV paper
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Bottom line 2nd mortgages are credit score driven no matter what bank you are going to use. The higher the ltv the better the credit score is needed.
Lori
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WHo said anything about 2nd mortgages? I believe this is a 1st mortgage. Actually regardless of score, as long as there are other compensating factors, i.e. income, low DTI, assets, REO's, etc have your broker upload it through Fannie Mae DU or Freddie Mac LP. That is exactly what an underwriter does. If your broker was a smart one, he would have already done AU (automated underwriting). The AU doesn't necessarily count ONLY score. I have gotten an A paper deal with a 620 primary borrower score on A paper... it is feasible. Also, because you are primary, and she is coborrower, I don't see any problem why this deal wouldnt go through DU with an accept. Also, you actually input the credit reference number so you see EVERYTHING. Tell your broker to next time try AU before saying you can't do an A paper deal... they're not fannie or freddie and have no idea what the AU might say.
w/ 713 mid you can go 100% stated on a non-owner occupied investment property all day long! I would find a smarter, more aggresive mortgage broker if he is having ANY problem in achieving what you and your wife need.
Good Luck!
Personally, I would try to get those items removed from your wifes credit. it may take a month or two but if that is the only thing holding you up it would seem the time is worth it. I got three paid collections off my report within 2.5 months
Good luck
Quote:
On 2004-11-16 15:25, Devlon wrote:
WHo said anything about 2nd mortgages? I believe this is a 1st mortgage. Actually regardless of score, as long as there are other compensating factors, i.e. income, low DTI, assets, REO's, etc have your broker upload it through Fannie Mae DU or Freddie Mac LP. That is exactly what an underwriter does. If your broker was a smart one, he would have already done AU (automated underwriting). The AU doesn't necessarily count ONLY score. I have gotten an A paper deal with a 620 primary borrower score on A paper... it is feasible. Also, because you are primary, and she is coborrower, I don't see any problem why this deal wouldnt go through DU with an accept. Also, you actually input the credit reference number so you see EVERYTHING. Tell your broker to next time try AU before saying you can't do an A paper deal... they're not fannie or freddie and have no idea what the AU might say.
A paper doesn't go one loan 100% A paper is an 80/20 loan.
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I agree with Tinman, and must add that B/C lenders and brokers also have "A" Paper programs for Zero lates and NINA/SISA loans. Don't let yourself be taken by a broker that has no Big Boys to originate loans through (such as Countrywide or Washington Mutual).
Also, the only Freddie or Fannie 100% refi's are for those who's initial purchase loan was a 100%, !03%, or 105%).
A lot of lenders are starting to ignore MEDICAL collections because they are so frivolous AND abundant! I think nearly everybody has a medical collection. I think the lenders have finally noticed that sometimes you don't even get a chance to pay before it gets turned over to collection and it doesn't reflect on your ability to pay so much anymore as other collections. However, most credit issues "drop off" after 7 years, and I don't think this should be holding her score down THAT much. Have you also looked at the length her credit has been open, the amount of credit compared to her balances (if they're high, see if you can up your credit limit), the amount of inquiries shes had recently, etc.
I am in the Mortgage Business. Most Banks will use the lowest middle score when approving this loan. Remember that every program has qualifying guidelines and the majority are driven by your fico score.
I am in the Mortgage Business. Most Banks will use the lowest middle score when approving this loan. Remember that every program has qualifying guidelines and the majority are driven by your fico score.
Use credit restoration service to remove any bad items, or do as another person said, dispute them over and over until they remove them. It costs $150 to start and $44 per item, per bureau and per person. Try it or pay for the service.
Thanks,
David
I disagree with hugoboss08, The primary borrower’s middle score is used. The primary borrower is also the primary wage earner of the household. A FICO of 580 gets a borrower in PRIME lender status. Of course, rates are lousy and don’t get better until 620. To qualify for the lowest rates, a borrower need to be above 640. and a 720 score will often come with a .25 discount on points, that the Broker will generally apply toward paying for the Lock fee or substitute for a NOO fee.
In mrzog34 situation, he could always go through a new lender and leave his spouse off of the loan application (as long as her accounts from 5 years ago are not Joint accounts that appear on his credit report.