I need a 165K mortgage, and I have 11 months to do it

[merkurfan]

So, at least I have some time huh?

heres the deal. Due to several new lines of credit that are heavly used (but the ballances are dropping rapidly with $300 a month payments to all 3, highest CL is 3K, total on all cards 5500)

My Fico is right around 610 right now. I expect as the ballances drop, and the accounts age, this will go up. here are the two things killing me right now.

I have a judgement from a old business lease that is sticking like glue to EX and TU. I know I am going to have to do something about this. It falls off in 11/08 (under 11 months away) but will likely be dug up by the lender right? judgements live 10 years in MN and can be renewed for 10 more.

Tax liens. I have two, one is paid in full, the other is reported by TU and EX as paid in full but is not. I have tried to settle with the state for 50 cents on the dollar and 75 cents. They refused and cost me a job because they started a wage garnishment I could not afford. They show paid, but likely the lender will dig the unpaid one up.

The old business lease is 28K, 2 years ago they where willing to settle for 5K. 2 months after i moved out, they rented the space again. They sued for the full term. If I actually paid them in full, they would be in voilation of state law. collecting rent twice on one space thus denying me use of the space. I suspect i could get them to settle for 3500-4000 now. The CA that is holding the debt is the same one I have slapped down before and am getting ready to do again about a reinsert. They are not very interested in me any longer and will likely do what ever they can to avoid me.

The tax lein is 14K, this is going to be a toughy. like I said, I have had NO luck getting them to accept any less. 50% of that ballance is penalties (you thought the CC's where bad. owe the state/fed some money.. you'll beg citi for the money to pay them)

My stratagy.. pay down CC's, work on CLIs over the summer/fall. Get enough avaliable credit to pay off tax lein. settle judgement with cash under their nose. Get approval on morgage. Use CC's to pay off lein right when lender says, hey gotta settle this before we move forward. Pay um and hope to god the CC does not update before closing.

Any other ideas welcome. I have tried and tried to get the state to settle with me on the debt. Since Minnesota is having $ problems they will not accept anything less than full amount. it also costs 250 to even offer a settlement. Along with your 250 you have to include a complete listing of where your money is, where it comes from and all assets (so they can just go collect them and use that for the debt).

I have until april 09 to do this. Or my locked in price on this house goes up.

The house was just aprased (at todays market prices) at 205,000 so if I can maybe roll in the pay off of the lein at closing (seller is VERY flexiable on how things get done. raise price of house, he pays debt at closing. what ever needs to be done) it's a option that is on the table. Right now I have a 1 year contract for deed. buy at the end, or re-write at the same payment/interest rate, but the price goes up to market price (might go down.. if so. I will wait past the end of the contract )

[momof5]

Wow. You had a rough go for a time, huh?

First of all, if you read the FCRA, the judgments are like any other bad debt...they report for 7 yrs. Yes, they may be renewable, but the DOFD doesn't change.

For the taxes, I would call a tax negotiation firm. Given the state of the econmy, one would think that the gov't would be happy to get .5 on the dollar...but they may listen only to a professional and I would think the fee would be worth it. Check it out.

Until you qualify, DO NOT open any more accts. You need to let whatever credit you have season.

Contact a mortgage broker who deals in FHA loans. FHA is like VA, score is irrelevant....the most recent payment history is what matters. SO, it might be in your best interest to save your 3% to get into an FHA mortgage - 30 yr fixed.

I wish you the best. Let us know how it turns out.

[merkurfan]

Wow. You had a rough go for a time, huh?

you could say that. I had a business from 1995 to 2001, I had a partner. who said they where cutting checks to the state for sales tax/income tax and to the IRS.. they where not. they pocketed the money for 3 years till the letters started coming. then vanished. all told they made off with just shy of 250,000 dollars. IRS accepted 10 cents on the dollar. state said get a conviction and we'll wave the penalties and interest. Since the person has never been found... (ya.. theres warrants)

First of all, if you read the FCRA, the judgments are like any other bad debt...they report for 7 yrs. Yes, they may be renewable, but the DOFD doesn't change.

I know this. however, doesn't a lender or title company check in to that stuff? the judgement would still be valid and collectiable.

For the taxes, I would call a tax negotiation firm. Given the state of the econmy, one would think that the gov't would be happy to get .5 on the dollar...but they may listen only to a professional and I would think the fee would be worth it. Check it out.

I spoke with a couple. Randy something or other, and tax masters. both wanted 1500-2000 just to start on the problem. both said they did not have much luck with minnesota. I contacted a few local lawyers and was basically told they don't mess with the state. leads to "problems" (i guess maybe a audit?) So I am going to have to tackle this one myself. I don't have a problem with the 250 to make a offer, I have a huge problem with the information they want me to turn over with it. Why would anyone accept someones offer for less if they turn over a list of what they own, where they work, and what assests they have? it's like a come and get it list.

Until you qualify, DO NOT open any more accts. You need to let whatever credit you have season.

I'm done with new lines. Just going to build on the ones i have. I just got a unasked for CLI from one of my CC's.. they pulled a soft. with frozen reports it's all they can do.

Contact a mortgage broker who deals in FHA loans. FHA is like VA, score is irrelevant....the most recent payment history is what matters. SO, it might be in your best interest to save your 3% to get into an FHA mortgage - 30 yr fixed.

I wish you the best. Let us know how it turns out.

I spoke with a broker a few months ago. said to get rid of the lein and judgement and I could likely get a FHA. 10K down is not hard to do. thats about 7%.

[StuckInTheMiddle]

Wow I thought I had some hurdles to get a mortgage! I like everything correction: Momof5 had to say.

We got an FHA mortgage with Wells Fargo 4 months ago (approved a year ago, but it took some time to get the previous house sold and find a new one). 30 year fixed @ 6%.

I will say ... money talks, if you have it. We put 10% down and was never questioned about the 535 FICO score (medical collections only though). I think FHA focuses mainly on debt-to-income ratios.

If I were you I'd monitor your credit report very carefully to make sure that what is supposed to fall off your credit report... does. I have TransUnion monitoring and its easy to use at a reasonable price $15 a month I believe. They'll notify you daily of any change to any 3 of your reports.

Secondly, paying off credit cards is something well within your control and can only help your score.

As for the tax lien, I'm not confident you can get a mortgage with this outstanding. If I were you I would try to find a way to obtain a loan to pay this ASAP - perhaps a personal loan from a friend/family member? Even if you gott a bank loan, my guess is the 'hit' to your report would be better than the outstanding tax lien.

Finally, don't beat yourself up if you can't make the goal and please please please don't get into a mortgage you can't afford out of desperation. I've seen a lot of people get into 'owner finance' arrangements with huge markups on the price above and beyond what the regular market would pay.

[merkurfan]

if I can't get what I want (7% or less) I'll just keep renting. the tax lein is the big one. I am going in to the devils belly on Wensday to speak with them in person about settling it. we'll see where I get with it. I refuse to tell them where I work (they take 25% of gross) because it'll force me in to a second/third job. if I can get to an agreement in writing with them for a fixed monthly amount and a acceptiable amount owed (remember, I originally owed them 7500, they have already got 4500 out of me over the years and i still owe 15,000!!!) I'll let them get their payments by garnishment if that is how they want it.

[flacorps]

Not to be too flip, but there are 49 other states and some territories and possessions you could go live and work in without even mentioning the entire rest of the globe.

And I know for a fact Minnesota will settle with you for ten cents on the dollar if you live someplace else.

Not to mention judgments have a way of not following people around, despite the availability of the UEFJA.

How long are you going to hang out in a debtor's hell that freezes over?

[merkurfan]

Well.. it if was easy enough to pack up and leave..

We have family here, I just landed a darn good job with TONS of advancement options. sadly, every location owned by the company is IN minnesota. I suppose I could move to Hudson WI but the 4 dollar gas will kill me.

we had been talking about TN before I was offered the job. I got a little nervious about it because they have the highest forclosure rate. Ya, I could buy a house there, but, where there be any jobs?

[flacorps]

I think you need to focus on the tax situation first then.

Do not worry so much about your 11 month time frame ... there will always be plenty of houses and prices will continue to be under downward pressure for years to come.

And as for the judgment being on your reports or not being on your reports, the key thing to realize is that you'll have to disclose it on your mortgage app (or it will be fraud). Nobody here can tell you to commit fraud.

As a matter of strategic timing, it might be good to accumulate funds to settle both, then settle the judgment after the state tax situation, but while the state tax situation is still reporting as unpaid (delay the filing of the release if possible ... but keep in mind there will be some lag in any event for it to show up on the CRA reports and Lexis/Nexis or what-have-you ... but if the judgment creditor is working with TU or an affiliate, the lag may be reduced because TU gets its own public records).

[merkurfan]

both tax leins report paid. only one is. I am not complaining about this. but it can't be undone on the reports.

[flacorps]

both tax leins report paid. only one is. I am not complaining about this. but it can't be undone on the reports.

Somehow your judgment creditor needs to be disabused of the notion that the state tax matter is settled. I would think that would be fairly easy ... the state will give you a letter telling you what you owe at any time, won't they?

If there were to be a lag in the filing of the judgment satisfaction (because it's sitting in your sockdrawer in recordable form, awaiting filing at your whim), we could turn the situation around and have the state thinking there was still an unpaid judgment out there ... if the state has been collecting your tax refund, modifying your withholding to eliminate it would be additional motivation to get some cash they would not otherwise get by compromising with you for a lump sum in hand.

The goal here would be to have each creditor incorrectly thinking that their recovery would be hindered or delayed by the possibility the other would be bogarting the available cash first.