Items in dispute while applying for mortgage

[pinkeysas]

I have 3 Unpaid Collection Accounts that are in the dispute process with the CRA's. I am going to meet with a mortgage lender tomorrow to try to get prequalified for a mortgage.

My question is, because i have some items in dispute proceess with CRA's is it bad for me to be applying for something right now?

These items i am disputing are for small amounts so if they come back verified I will be paying them off because I would need to in order to get my mortgage.

[hopen4800]

Hey Pinkeysas,

I recently did a mortgage with almost the exact situation. The lender will want to know for certain that the stuff is taken care of. So have documents and letters from creditors that these are paid, hopefully PFD'd. Otherwise the lender can pay these off at closing but you lose your negotiation leverage because lender will just pay without helping the TL look any better (other than pd). If your broker doesn't give you a warm and fuzzy feeling all over about helping you KEEP SHOPPING. Your a valuable consumer and they're gonna make a ton of money no matter what your fico is. There's no place like Home! Peace

[pinkeysas]

Thank you so much for the info. We sat down with a different mortgage lender last summer and she basically told us to get out of her office and not come back until all items were paid.

SO we got rid of most since then. But then I found this WONDERFUL website and decided to Dispute the remaining 3 small ones that are left.

Its nice to know someone else had the same experience. And that there are lenders out there that will help you out or give you options.

But do you think its a bad thing to have my CR run by a mortgage company while these items are in dispute??????????????

Thanks again.

[hopen4800]

If your worried about a hard pull, I asked my broker to look at very recent reports I pulled and ficos I paid for (all Softs) and asked her to do a sort of "feasibility study". Last year when you applied it seems like a lot of lenders were pretty arrogant as business was booming, some of these same folks are swirling in the bowl now and are more consumer friendly. The good brokers are good brokers and will help no matter where the market is. I'm in Cali so it may be different for you "cheese-heads".

[pinkeysas]

Ha Ha, well now to be technical. California stole the cheese head title from us recently when they started producing more cheese than we even do. So you my friend may be considered a cheese head now yourself. So welcome!!

As far as the market goes here, the house we are looking at was built new in early 2006 and has been on the market ever since!! And his price has dropped about $70,000 since last year. So all good news for us. We are just keeping our fingers crossed for financing now.

Thanks again for your input

[buckeyechick1219]

I will say from personal experience, my husband and I walked into a mortgage lenders office in the middle of February and they did a hard pull of our report. There was a Dell account on there that had previously been listed as fraudulent with a $0 balance, so Kroll Factual Data (the company pulling and compiling the reports) conferenced me in with Dell to verify that the account was $0.

Not surprisingly, they couldn't find the account by account # or my SSN. I was supposed to get a return call from Dell the next week (we called them on a Friday.) A week later, I got a letter that the debt was being collected by Asset (you can find my posts about this all over the board.) And Asset has pulled my report at least six times since we first went to the mortgage lender.

That said, the mortgage program we got into allowed us to have $5000 or less of "bad debt" and still be approved. If we had more than $5000, we had to pay the whole thing off, but since I had documentation that the largest account on there was fraudulent, we were approved at 6%, 30 year fixed, $0 down.

But yes, the collectors have come after us full throttle since then.

[pinkeysas]

That said, the mortgage program we got into allowed us to have $5000 or less of "bad debt" and still be approved. If we had more than $5000, we had to pay the whole thing off, but since I had documentation that the largest account on there was fraudulent, we were approved at 6%, 30 year fixed, $0 down.

So I am assuming that you got in with some type of First time home buyers program to get the $0 down is that correct? Or was it a conventional mortgage that allowed you to have that amount of bad debt?

Also, in your experience what percentage of debt to income ratio did you have to be at to get approved?

[hopen4800]

Have you talked with the builder/developer of the property? I'm sure if its been on the market that long they would participate in getting you in that house if they're still solvent. We've got housing developments here that are aching for buyers and have some unbelievable deals, upgrades, etc. The inventories are too high so deveopers are scrambling. sounds the same there.

Also, I will wear my new title with pride! Thanks for the cheese history lesson and cheese "fun-facts". I guess happy cows do come from California. Go Packers.

[buckeyechick1219]

So I am assuming that you got in with some type of First time home buyers program to get the $0 down is that correct? Or was it a conventional mortgage that allowed you to have that amount of bad debt?

Also, in your experience what percentage of debt to income ratio did you have to be at to get approved?

We got in on the Ohio Bond program to get the $0 down. I believe it was the same program that allowed us to have that amount of bad debt. Basically, we went to the lender and said "Here's what we have," and he said, "Here's what we can do for you." He actually said that our credit scores (near 650 on all three reports for both of us) were "good" (although I thought they were lacking, and I can't seem to get approved for a credit card.)

I'm not sure what the debt to income ratio is. I was honestly surprised it went as easily as it did. I've got about $50k in student loan debt that I will be paying on almost as long as we're paying on the house.

[pinkeysas]

well we are going in for a pre-approval tomorrow and I am pretty nervous cause i am always the glass is half emtpy type of person. But yours and Hopens stories has me a bit more at ease.

Thanks alot.

[cracrap]

every lender has different requirements for lending,and depending where you are and what you can qualify for....there is no standard requirement across the board....just because youre denied from one does not mean youll be denied from another...but you need to be the one in charge of shopping for a loan..if you let a broker do it for you then youll be paying extra for giving him the "priviledge" of doin it for ya and your cr will get run to death...

[hopen4800]

Remember, You are the informed consumer and a valuable customer. I've read some posts here from some really sharp mortgage people. They seem very willing to advise. Read up on "points", APRs, prepayment penalties,1st time buyer (if applicable) etc. You could also try(tongue firmly in cheek) a block of California Cheddar to sweeten the deal. Peace

[pinkeysas]

You could also try(tongue firmly in cheek) a block of California Cheddar to sweeten the deal. Peace

You had to throw that in there didn't cha?

Well, I am very green in this mortgage dept. but by reading up on this site I have an idea of things I should pay closest attention to.

I dont quite understand what it all means. But I truely truely am thankful for this site because I will be back here soon with more questions im sure.