Help! FHA Approval in jeopardy?! (loans, credit report, loan, guidelines)

[michiganalum]

Well, thank God I purchased Fico score monitoring at myfico.com because I just received an e-mail that my FICO score dropped 57 points (from 730 to 680). My utility company posted a 120-day late on my credit report for failing to pay a balance. We were supposedly on the 'budget plan' and for some reason a balance has accumulated over the last 3 months even though we were paying the 'budget amount'. I have no other lates and I will be calling the utility company tomorrow morning to figure this out. BUT, what will happen to my FHA pre-approval?

I was preapproved through a broker for FHA, but we are buying a house with Pulte and are now going to have apply through Pulte Mortgage. Assuming the utility company is employed by a bunch of bastards and will not update my credit report, is my FHA mortgage in jeopardy?

I have no other lates, six figure stated income salary, mortgage/debt was well within DTI....help?!!! Thanks!

[Daddys///M3]

You're pre-approved for an FHA mortgage and you are stating your income? That cannot be right, FHA is a full doc only program. I won't say for sure that your FHA pre-approval will be in jeopardy because of your utility lates, but it certainly won't help. Guidelines focus more on mortgage lates. If you can get a letter stating that the utility company was actually at fault then you shouldn't have an issue.

[renriq02]

The utility company is being reported as a collection account....this is why your score dropped. They dont report monthly payments to the credit bureaus unless you're seriously late.

FHA isn't credit score driven, but view the credit worthiness within the last 12months.

They look at mortgage lates AND credit lates. If you were late within the last 12months, this can make it harder for you to qualify for FHA. If you have recent collections, then they may require you to pay it off.

It depends on what the Automated Underwriting System (AUS) states.

Originally Posted by michiganalum

Well, thank God I purchased Fico score monitoring at myfico.com because I just received an e-mail that my FICO score dropped 57 points (from 730 to 680). My utility company posted a 120-day late on my credit report for failing to pay a balance. We were supposedly on the 'budget plan' and for some reason a balance has accumulated over the last 3 months even though we were paying the 'budget amount'. I have no other lates and I will be calling the utility company tomorrow morning to figure this out. BUT, what will happen to my FHA pre-approval?

I was preapproved through a broker for FHA, but we are buying a house with Pulte and are now going to have apply through Pulte Mortgage. Assuming the utility company is employed by a bunch of bastards and will not update my credit report, is my FHA mortgage in jeopardy?

I have no other lates, six figure stated income salary, mortgage/debt was well within DTI....help?!!! Thanks!

[michiganalum]

Sorry, I meant my income was full documentation, not stated.

It's not listed on my CR as a collection. It's listed as utility that is 120+ days late (which is incorrect). Oddly enough, they have reported to my CR as paying on time through last month.

DTE Energy is one of the few utility companies in the U.S. that reports payment history to the national credit bureaus.

This is now the only bad mark on my CR. I have never had a late payment or collection on my CR. It's been completely stellar. I'm hoping DTE will be cooperative and this will end up being a non-issue, but for right now I'm extremely worried about it.

[ChipL]

If it is reporting on your credit report as a trade, you want to
1: figure out with the utility co if they are indeed correct and you are indeed late.
2. If it is an error on their part have your broker do an rmcr and update the corrct info for that trade. It will not update the bureaus forver, it will only change this one report but it will be enough to change the results of the underwriter looking at a incorrect negative history within the past 12 months.
3. If it is corrrect and they are in the rights with reporting this. Your score is still fine, and if everything else falls in line, you just need the broker to run it through automated underwriting for preappoval. If it does not cause a problem there, which I suspect it might not, then you're good to go.

[michiganalum]

Thanks for the reassurance, ChipL. This is our first house, so naturally we are walking on pins and needles until we get the keys.

[renriq02]

They wont update the report unless the company will be able to cooperate with the credit supplements.

It's still weird that any utility company would report someone period.

Is there a 'past due' amount next to the tradeline?
Make sure this is taken care of BEFORE you apply again.
If the U/W has already seen this they may require documentation to show otherwise. Even if they take it off they will request the documentation.
FHA loans aren't like conventional loans. The Underwriter for FHA are licensed Underwriters, and they put their license on the line when signing off on something.

I would get this in writing that shows you're in a payment plan.
Make sure your document doesn't read that you are 'past due' this amount.
It will also be hard to justify that you're making 'payments' on utilities when they should be paid in full each month.

[michiganalum]

Originally Posted by renriq02

They wont update the report unless the company will be able to cooperate with the credit supplements.

It's still weird that any utility company would report someone period.

Is there a 'past due' amount next to the tradeline?
Make sure this is taken care of BEFORE you apply again.
If the U/W has already seen this they may require documentation to show otherwise. Even if they take it off they will request the documentation.
FHA loans aren't like conventional loans. The Underwriter for FHA are licensed Underwriters, and they put their license on the line when signing off on something.

I would get this in writing that shows you're in a payment plan.
Make sure your document doesn't read that you are 'past due' this amount.
It will also be hard to justify that you're making 'payments' on utilities when they should be paid in full each month.

Thanks. I spoke to DTE this morning and they said the balance was a leftover from the budget billing. The operator said it was 60-days over due (rather than the 120+ they reported). I went ahead and paid the entire balance, but the department that does the 'credit reporting' isn't open until Monday. I'll have to speak with that department to get the CR mark taken care of. She also confirmed that there was never a letter sent to us stating the budget billing had ended or that we were past due, etc. It amazes me that companies will report things to your CR without caring about how much work we as consumers have to do to get it corrected.

On my credit report it lists it as: Past Due - No amount reported. In the comments field it says: 120+ days past due, no payment made for four months. Next to the 30, 60, 90 days late fields it says '0' for each one of them.

[Bette]

Originally Posted by michiganalum

Well, thank God I purchased Fico score monitoring at myfico.com because I just received an e-mail that my FICO score dropped 57 points (from 730 to 680). My utility company posted a 120-day late on my credit report for failing to pay a balance. We were supposedly on the 'budget plan' and for some reason a balance has accumulated over the last 3 months even though we were paying the 'budget amount'. I have no other lates and I will be calling the utility company tomorrow morning to figure this out. BUT, what will happen to my FHA pre-approval?

I was preapproved through a broker for FHA, but we are buying a house with Pulte and are now going to have apply through Pulte Mortgage. Assuming the utility company is employed by a bunch of bastards and will not update my credit report, is my FHA mortgage in jeopardy?

I have no other lates, six figure stated income salary, mortgage/debt was well within DTI....help?!!! Thanks!

Hi - I have a credit background so here goes. I am now a mortgage broker so I know it from both sides. I sold my company to an Experian servicer in the late 90's so I have worked both sides.

I have seen on credit reports what you are referring to and have been successful in getting inequities reversed. Contact the original credit (DTE) and get a letter reversing this. Once you get the letter, this can be rescored either by you directly (takes 30 days or less) or by your mortgage broker. If for some reason, they will not remove it, make sure they give you a letter showing that it is current and ask them to report along with the tradeline that you are disputing (which you are) the reporting on it. (They must do this if you request it in writing).

I would contact the firm first, get someone's name and follow up with them, also send it to them (your letter of dispute) via certified mail or overnight (signature). If they report it with the dispute, it actually negates it from score.

With a score of 680 versus 730 - if you are going FHA - this should not really affect you anyway but it's disappointing to have something out there like this.

Also another hint: If you are not getting help, ask for a supervisor. You like to speak with someone who knows "the ropes" and I am sure you will get it reversed.

Good luck and let us know how it goes!

[Bette]

Your score on myfico.com will probably differ from the actual mortgage score.