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LeapinLizards

Hoping to buy within the year, not sure about info given by loan guy, need opins

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Hello all, 

I am new to this site and have browsed through several pages of threads on the credit repair side, but my first question is really mortgage related.  

My credit is poor, FAKO scores of 567/569.  I live in Texas.

I know part of this is credit utilization-related.  I may have gone about this wrong, but I have strung along payments (more than minimum but less than balance) on some small accounts (total $750 in CL over 3 accounts) to show payment history without having to continuously charge things to pay them off (hope that makes sense).  I know when I pay these down, my scores should come up some... right now, I'm at 60ish% utilization before this month's payments hit.  So, short story - this is easily fixable.

I have an FHA foreclosure that finalized 9/2012.  I bought during the top of the housing bubble pre-08 and the house lost value and the area went downhill.  As a single mom, I needed to get my kids into a better school district, so I walked away.  (Many mistakes were made here, but I had to do what I had to do).  

All currently opened lines are 100% paid as agreed except one erroneous 30 day late that I am about to tackle with the auto finance place that made the mistake.  There are about 9-10 "collection" accounts on my report - many are medical bills that are old and (I'm pretty sure) are what was left after insurance, even though one is pricey and they may not have applied my insurance info...

I gave all this back story to ask this question - I had a mortgage loan guy review my reports who claims to have background history in the credit repair field, and he said the only thing I can do to raise my scores is to start with the low dollar medical bills and offer PFD to have about 5-6 of those removed that way.  I asked specifically about disputing the items with the bureaus and he vehemently denied that this was a workable solution.  My question - does this sound reasonable, or should I avoid this guy?  I really want to be able to buy soon because I have the neighbor from *the hot place* who lives below me and I want OUT - and I want the tax break that owning offers! 

If that was hard to follow, or more info is needed, let me know!

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11 hours ago, LeapinLizards said:

My question - does this sound reasonable, or should I avoid this guy?

Not only is it reasonable but it is the fastest route to getting them off your credit report.  However, you have another major barrier to owning another home.  NO mortgage underwriter (this is higher than the loan guy) is going to underwrite you at a decent rate with a foreclosure still reporting.  ANYTHING that can end up turning into a potential lien on the new home will have to be dealt with before you can be approved for a new mortgage.  In relation to that first home:  Texas is a recourse state and they can still sue you for the deficiency balance on that foreclosed home.  

By apping for a mortgage now you alert creditors of this desire to make a major purchase and lose your leverage in negotiation in settling accounts.  The biggest one being that foreclosure. You might want to ensure that the SOL to sue for that deficiency balance is passed before you do any of this otherwise you could have far bigger problems than your neighbor.

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So, the foreclosure was FHA, and I'm looking at FHA again.  My understanding is that FHA allows you to re-app FHA again 3 years after the date of actual completion.  I hit that point this past September.  The mortgage account on the report shows a $0 balance.  The SOL in TX is 4 years.  DOFD should have been before 12/11 because that's when I walked away.  I know, I should have done deed in lieu, but I didn't know that then.  Is there something more that I need to be concerned about or look into? 

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