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If there are 3+ yr old charged off accts on some reports, and a collection agency crops up on the reports for one of those old accts within 12 months of a mortgage loan, will this be cause for a denial (fha)?
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Quote:
Originally Posted by jctx
If there are 3+ yr old charged off accts on some reports, and a collection agency crops up on the reports for one of those old accts within 12 months of a mortgage loan, will this be cause for a denial (fha)?
If a collection agency buys your debt (typically for pennies on the dollar), they'll do whatever they can to collect. It's nothing for them to put the delinquent debt on your credit (once they own the debt), but it's up to you to contest the charge. Even though the SOL's says 3 years for the debt collection, doesn't mean it's off your credit report. Two completely different issues. Debt collectors know the average American is just too lazy to fight and know most will settle - especially if it's a debt they know they incurred.
I will say, if that's all that is on the credit report - debt that someone walked away from, it's going to be a problem these days. Underwriters will want to see credit from other creditors handled in a proper manner, with no late payments. Chances are strong a rental reference would be required, with zero late payments. Many apartments are either reporting to the bureaus, or, on the Verification of Rent, they are making note of how many times the tenant paid a late fee (more typical of large apartment complexes).
If someone is looking for little to no down payment, has unpaid collections, no other credit references and anything but a strong rental history, get your act together. I do, however, agree with the others about not paying the debt (especially if so large it can't be paid) with the exception being: if it's obvious you need to wait a year or so, try to negotiate the payoff to within your budget. Showing up as a "paid less than agreed" is rated the same as paid as agreed, for the final disposition (obviously, the history will remain). Your score will take an immediate hit, but it will rise rapidly as more time passes.
I have a 6 year old charge off on an automobile the loan where I was the co-borrower the amount was for $22k .. I was wondering if I could find a mortgage lender that would approve me with a 640 credit score here in Louisiana..
I have a 6 year old charge off on an automobile the loan where I was the co-borrower the amount was for $22k .. I was wondering if I could find a mortgage lender that would approve me with a 640 credit score here in Louisiana..
Not any more. The charge-off should roll off your credit at 7 years, though. Was it maybe paid by the main borrower?
Not any more. The charge-off should roll off your credit at 7 years, though. Was it maybe paid by the main borrower?
Unless the creditor files a judgment, which is quite common on debts over $5000 in the 11th hour.
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