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Old Debt On Credit Report


faiths13
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Actually, it says "all" and does not provide an exception for medical debt. The exception it does provide is if all the debt (in collections) total less than $1000 AND are more than 2 yrs old.

For medical to be excluded there would have to be a written exclusion. This letter is directly from HUD.gov you can go there and check the various underwriting criteria. Also, check with your new mortgage lender. Believe me, most of us in the business don't want to see this change, but its here.

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Faiths13, there is a new FHA rule going into effect next month, April 1, 2012: All collections equal to or over $1000 have to be paid or you have to have 3 months of payments toward the collection on an agreement before you can close, even medical. The notices were just sent out last Friday (Mar 2) regarding this new rule. See this link: http://portal.hud.gov/hudportal/documents/huddoc?id=12-03ml.pdf

So if you have more than one collection, for example, and they total more than $1000 they all have to be paid.

If you apply for a mortgage the CA is going to see a mortgage inquiry and be less inclined to negotiate so do your negotiating before making application with any lender.

For others, the old rule is still in place so if you find a property and you meet the other qualifications you are good to go as long as you get the FHA case number before April 1, 2012. To get a case number you have to have a contract on a property and make formal, official application and they have to have it in the system to get the case number assigned.

Hey Denita,

Good post. Thanks for putting HUD related stuff up, and with excellent advice and commentary.

I'm also cleaning up my credit to buy a house and have been looking at HUD as an option. The current program of buying a house for $100 down in some states is seriously attractive. Luckily it is available in Florida.

Many thanks for consistantly good posts. I am appreciative.

-RD

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Looks like I may be renting for a while. :-( Planned to start shopping for loan after graduation in November. According to this, all collection debts for both parties on loan are added in the mix and have to equal under 1000! OR be over 2 yrs since last activity. If a tl by jdb unexpectly shows up with recent date opened .. does this not affect possibility of loan? As long as last date of activity is over 2 yrs.. RIGHT?

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If you read all the way to the bottom of the Mortgagee Letter 2012-3 it also has a provision for you to make payments on the debt and show 3 payments per the agreement and that will be accepted by FHA too. It's not the best course of action to be making payments on the collections for a variety of reasons, but it is allowed according to FHA.

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If a tl by jdb unexpectly shows up with recent date opened .. does this not affect possibility of loan?

If you've got recent TL activity by a JDB it will most definitely affect the possibility of loan, or will affect the terms, or interest of the loan.

Obviously the first thing to do with this *unexpected* TL showing up is finding what it's about and either disputing with the CD's or the regular DV tap-dance.

Hopefully, this isn't happening to you O.L.T. right?

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I have finished my 1st round of disputes with CRA's. Don't know why Experian is such a pain! But it's not too bad. Have 2 debts not in good standing.

One cc that's gotta come off due to time lapse. Experian the only one holding it on.

LVNV Did verify. Waiting to hear from them myself. old cell bill. (never had this company)

EOS CCA also list cell phone account in collections. Verified. My cell company, seems funny. I have this number since 1999.

After viewing reports I have NO new activity in past 2 yrs. Was confused cuz LVNV keeps updating .. But does show OPENED 8/2011. Since they are JDB's this means debt account I supposedly owe is older than 2 yrs. LVNV was deleted from Equifax only!

Now to start workin on my hubby's credit. I know there is an electric bill past due. Don;t know how it took so long to show up. Have not used this company in over 2 yrs. It could be legit. Called OC to get information.

There is a medical bill on his collections that is NOT ours. This is the thorn in my side now. It's over 3000. We didnt get treatment. So frustrating!!

Really want a house by end of year!

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LVNV Did verify. Waiting to hear from them myself. old cell bill. (never had this company)

EOS CCA also list cell phone account in collections. Verified. My cell company, seems funny. I have this number since 1999.

After viewing reports I have NO new activity in past 2 yrs. Was confused cuz LVNV keeps updating .. But does show OPENED 8/2011. Since they are JDB's this means debt account I supposedly owe is older than 2 yrs. LVNV was deleted from Equifax only!

OLT,

Notice any discrepancies here? I do.

You mentioned with LVNV that you never used the company in question, and with EOS CCA that you have had the same number for years, yet *both* verified with the CB's. Does that seem strange to you?

It kills me how this CB to JDB verification works:

CB sends an email, "Is this account really the consumers account?"

JDB says, "Yup, it's theirs".

CB says, "OK, thanks".

Verified. :shock:

You need to request method of verification with the CB's now.

There is a sticky about LVNV, so read up on them. I beat them in court. A google search about them will yield results that will show them as the devil incarnate. That about sums them up.

By the way, LVNV reporting as of 8/11 is the date that *they* first reported the account, so they must have bought it around then. It's legal for them to report it btw. Not fair, but legal nonetheless.

-RD

Edited by RockDaddy
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