john1280

5 points to dream home....please HELP!!

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Greetings to all the wise ones!!

 

I have spent the last 24hrs reading every nook and corner of this forum to find answers to my specific problem to no avail! Please help me out so I can achieve my dream!!

 

I am in process of buying my first home, when I went for my pre-approval the mortgage specialist(MS) ran my credit and picked my median score of 660 to grant me the pre-approval letter. My 3 scores were 654/660/679, That was back in April. Fast fwd 3 months and I finally found a house that fits my budget, the paperwork went to underwriting(UW) and I found out I got denied, because my median score dropped to 634!? My new scores are 629/634/670, I have to be at 640 to get approved for the mortgage. 

 

I immediately went through all 3 reports and NOTHING has changed since then, everything looks EXACTLY the same as April report, I am baffled as to what happened and why the score dropped?. My credit-card balances are below 10% on ALL credit cards as of today, back in April they were about 15%, all payments have been on time and never late! I had one collection account that is scheduled to fall off next year, it was on my report then and is still on now, so what gives?

 

My mortgage broker wants to know if I want to re-run the credit and I told him to give me couple of days till I figure it out.

 

Anywho, so i did some reading and learnt that if you dispute negative items on your report it temporarily boosts your score. SO I used common sense and only disputed 2 of 3 reports (the 629 and 634), my question is this......How long should I wait before giving the UW green light to go ahead and re-run my credit so they could see the boosted score? Is there absolutely ANYTHING I can do to get a 6 points boost in 24hrs? 

 

Any/All suggestions are most welcome, I appreciate all your help, Thanks a million.

 

Regards,

John

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Was the person who got you preapproved back in April with the same bank that turned you down?  Sometimes, mortgage brokers use 3-in-1 reports which are not exactly the same as the FICO Mortgage Score that a bank would use.

 

Also, having an open collection...even one marked "in dispute"...will probably get you turned down.  The mortgage lender doesn't want to see anything thjat might result in a lien against the property.

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"Was the person who got you preapproved back in April with the same bank that turned you down?  " - Yes. He submitted my paperwork to UW who denied me due to score being lower than 640.

 

The CO account is for $1000, worst case scenario I would pay it off on bank's request (even though I know for a fact it is NOT my account), also the SOL on that account is wayy expired, it is scheduled to fall off my report Jan 2014. 

 

So, in a nutshell there is nothing I can do to get this loan?

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@john1280 - if the collection is not yours, you should fight to get it off.  You can write a very strongly worded letter to the collection agency telling them this is not your debt and if they don't stop reporting it on your credit report, you will sue them.  This is an intent to sue letter.   They are in violation of the FCRA for reporting information that is not correct.  Also mention that's it's past the SOL in addition to not being your account.  

 

That's the angle I would use.  If you get this off of your report, you will definitely see a score boost.  

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