Deb's Lake Conroe Real Estate & Stuff! : "Sorry Charlie", Even Though You Qualify For The Loan There Is One Minor (MAJOR) Problem...

"Sorry Charlie", Even Though You Qualify For The Loan There Is One Minor (MAJOR) Problem...

...we simply won't give you the loan. Nope, sorry. YES, you make more than enough money. YES, your credit score is over 800+. YES you have supported all the documentation and you have been approved with one, tiny, itty, bitty, teenie, weenie, DISPUTE THAT IS STILL ON YOUR CREDIT REPORT!!!!

SORRY CHARLIE~

Anyone else find this problem? I absolutely do not blame the lenders for requiring NO DISPUTES since once upon a time people would dispute tons of items on their reports, buy a home since no one looked at them and then defaulted on their home loan as they did everything else!

I've run across a brand spankin' new glitch which has rared its ugly head. Very, very ugly head. I am lucky to work with a Mortgage Broker who is "hands-on", involved and diligent beyond the call of duty.

After requesting that a PAID SIX YEAR OLD DISPUTE BE SHOWN AS NO LONGER A DISPUTE one of the wonderful collection agencies simply SHRUGGED. "SORRY", THEY SAY. WE DO NOT SUBMIT A LETTER OF RECONCILED DISPUTE TO THE CREDIT AGENCIES. WE JUST DON'T.

Bottom line, the clients were told that if they had the CREDIT BUREAU physically contact them that they would verbally say, "it is no longer a dispute."

What are the odds of that? And, if it IS NO LONGER A DISPUTE WHY NOT PUT IT INTO WRITING?

Credit Bureaus are now becoming flooded with calls such as ours. The Bureaus can do nothing but report what any given CREDITOR reports. We basically have no recourse if we cannot get the Agency to report dropping any DISPUTE and there goes your chances of ever purchasing a home. NO MATTER HOW GOOD YOUR CREDIT IS OR YOUR JOB OR YOUR HISTORY OR WHETHER OR NOT YOU HAVE PAID THE AMOUNT DUE OR WHETHER OR NOT YOU EVEN EVER OWED THAT AMOUNT OF MONEY LEGALLY...SORRY CHARLIE.  

Have any of you experienced this before? When we began there were two disputes. Because BOTH were paid it seemed easy enough to get them off the report. One dropped off right away. The other? Who knows? My clients moved out of their home expecting a sale...a closing. Sad and I am one of many trying to clean up this mess. Any advice from you is welcomed.

Thank you my blogging friends.

Advice from the experienced...Review these facts with your potential Buyers!

Disclaimer: My writings are based upon life experience and I do not claim to be an expert at any of your professions...just mine.  

 

 

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Comment balloon 81 commentsDeb Brooks • September 22 2010 08:31PM

Comments

Deb, what a bummer!  Not to many owner financing options out there!...Good luck!

Posted by Sonja Patterson, Texas Monthly 5-Star Realtor Recipient for the Hou (Keller Williams - BV) about 8 years ago

Sonja, thanks a bunch but don't feel sorry for me! I feel terrible for the disruption in all these people's lives. I believe that as diligent Realtors we should share this with everyone! Any one of your buyers or sellers that plan to purchase after selling could easily get stuck with this scenario!

This is a matter of education for all~

Good luck to you too my friend,

Deb

Posted by Deb Brooks (Brooks Prime Properties Wichita Falls Texas) about 8 years ago

Deb

We've swung from one extreme to the other. Hopefully sometime soon we'll find a reasonable middle ground. We hear all the time that rates are great, but if they really aren't giving loans, it doesn't matter what the rate is.

Posted by Todd Anderson, Park City | Deer Valley Real Estate (You In Park City group - KW Park City Keller Williams Real Estate) about 8 years ago

Deb -

So, if I am getting this correctly, your Buyers filed a dispute with a collection agency for a non pay that was paid. The dispute is still showing ? For six years at that ?

If this is the case it is ILLEGAL. When you dispute with a credit reporting agency the dispute is clear, they have 30 days to respond. In other words they have 1 of 2 options, the collection must be removed if not validated OR it has to show that the dispute was validate PERIOD. If after 30 days they have not responded then the BUYER or the person allegedly owing the money submits another letter that they, the collection agency did not respond within the necessary time frame and they are then given an additional 15 days to correct. If not it it is moved immediately to Equifax, Experian and Trans union for removal.

I would need a little more detail BUT it is fixable. If this account is old and paid then all the buyer would have to do is submit receipt to all three credit bureues and it will be updated. If the account is old especially more than 2 yrs old suffice to say NO ONE will be able to verify the validity of the debt either way and it would be removed immediately.

I am gonna try and give you a call. My collection background runs very deep. I know this like I know my name.

Posted by Melissa Grant, The Law of Attraction In Life & Business (A Serendipity World) about 8 years ago

That's just unbelievable! No, wait, it's VERY believable! It should be a crime, too. I agree with Todd above. Why bother touting great rates when almost no one actually gets a loan? If they are pre-approved, that is almost like bait and switch! It should be actionable.

Posted by Virginia OnullConnor, Realtor - Temecula, Anza, SoCal (Realtor®, Photographer, Artist) about 8 years ago

Deb, I actually just went through this scenario.  It was just one of the credit unions that did not want to change the wording.  My client is a car salesman and does not know how to take no for an answer.  Amazingly he made it to the top and they took it off.  Thanks to his tenacity they are in their new home.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 8 years ago

Deb,

If someone with an 800 credit score can't get a loan, there's no hope for the industry to recover any time soon.

Good luck.

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) about 8 years ago

What a mess - I guess the message is to view your credit report ahead of time - and make sure its spic and span?

Posted by Liz Moras Migic, Chilliwack, British Columbia - Realtor about 8 years ago

You have one or two options.  Go with Melissa #4, and or go above the idiot's head at the collection agency.  There is no such thing as can't.  Did they understand the magnitude of this problem that CAN be solved?  'Charlie' will be getting his house.

Posted by Dee Mayers, San Gabriel Valley, CA about 8 years ago

I am so tired of one little issue causing a loan to fall apart for an over qualified buyer. But such is life :/

Posted by Ryan Case, 877-828-0710 (SCA Real Estate) about 8 years ago

marti garaughty, The Art of Marketing YOU

Posted by marti garaughty, a highly caffeinated creative type... (garaughty.com) about 8 years ago

Allyssa had her wreck in 2007.  U of M coded some of the treatment wrong. It took months to me physically going there for them to see their mistake and recode for the Insurance Company.

In the meantime they turned me over to a credit agency .

I asked them to write a letter saying it was paid, and their mistake.

Would they do it?

hell no....blood still boiling.

 

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) about 8 years ago

Consumer could possibly file a lawsuit against the creditor for violations of the Fair Credit Reporting Act.  Depends on the dollar amount and cost, etc.  If it is 6 years old though, just wait another year and it will drop off the report anyway.

Posted by Rob Arnold, Metro Orlando Full Service - Investor Friendly & F (Sand Dollar Realty Group, Inc.) about 8 years ago

Wow, that is a problem.  It is nice to have a hard working lender that keeps you informed but other than that I have no answer for you Deb, hope you can get this handled.

Posted by Ricki Eichler McCallum, Broker,GRI,ABR, - Your Coastal Bend Home Source (CastNet Realty) about 8 years ago

If I had suffered through this scenario as the agent, I'd be livid!  But worse yet I'd likely be suggesting to the client to "Sue for damages!".  It certainly looks like the agencies lack of business ethics, by not correcting the information, would give the client a case?

I'll just cross my fingers and hope I never have to deal with this scenario!

Posted by Martin Dorgan (Prudential Indiana Realty) about 8 years ago

Deb,

As a Lender, I too occassionally run into this situation. It is beyond me why the disputes cannot be removed at the Bureau level. A dispute is always initiated by the consumer, not the trade line. Therefore it only makes sense that if the consumer disputed the account, then the consumer should be allowed to "un-dispute" the account. It should not have anything to do with the tradeline at all.

I do think this is starting to ease up some, at least with my investors. As of late, ANY dispute shown on the credit report had to be fixed. As of August 1st, my investors have agreed that we must only address disputes that show up on the AUS findings. I have had two since that time that showed disputes on the credit report that were not addressed at all in the findings and both loans closed without a problem.

Maybe there is some light at the end of the tunnel.

Posted by Jody Murphy (JMurphyHomeLoans.com) about 8 years ago

That is part of what is wrong with our current market.  There is no "common sense" lending decisions anymore.  Just guideline after guideline that must be followed.  Even borrowers with extremely high net worths and huge downpayments have to jump through hoops to prove every detail in their financial life.

 

Posted by CHRIS HAYNES, The Mortgage Man (Peoples Home Equity Inc.) about 8 years ago

Hi Deb, I almost missed his but saw it on the Daily Drop. We are in the middle of refinancing our home to remodel and add on (I know we are crazy) and though we have good credit, income and everything else, it's amazing the number of constantly growing details that have to be answered. It's  shame that the horrible behavior of so many  both borrowing as well as loaning money since 2002 has caused this swing in the opposite direction. Someday we may actually see some kind of balance but probably only for a moment as we swing by!

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) about 8 years ago

And the merry go round continues to spin. Banks turn down qualified buyers, therefore less buyers in the market, therefore house values drop, therefore more foreclosures, therefore values drop more, therefore more foreclosures.

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) about 8 years ago

Deb, I'm a lender and can tell you it's not universal among all lenders, but I have heard that a certain major lender (who shall remain nameless, but is probably #1 on the getting bashed list) was rejecting loans solely for disputes.

My evidence is only anecdotal.

Posted by Greg Cook about 8 years ago

Actually, if I remember correctly, if there is a disputed item, then the credit bureau must remove it within 30 days if the borrower is correct.  I know 30 days can kill a deal though.  It won't go away unless the person takes action.

Posted by Eagle Ridge Real Estate Agents, Representing Buyers and Sellers in Eagle Ridge (Eagle Ridge Realty) about 8 years ago

Deb;

Coming off 20 plus years in the credit industry, fifteen running a very successful mortgage operation, I have heard and seen most "deal breakers". This is not the end all but most likely will stop your escrow cold in its tracks.  Your buyer will eventually prevail and get his loan, just maybe not on this property. Petitioning the credit agency to remove a "derrog" can happen if the collection agency refuses to remove the negative comment. If your client has irrefutable proof. I suspect though, the collection agency did not get the deal they wanted and settled for less that the "big commission" the collector was counting on. Collection agents are paid on commission based on how much they collect and the percentage of the original plus the new collection fees tacked on the top, sometimes five times the original amount. This is probably his little, "got you back". Even with the rules and regulations in place, collection agencies are the most unregulated group affecting our industry. For the future, I suggest you every RE and Loan agent, take some classes in collection practices and tactics.  It's an eye opener and will teach you valuable lessons on how to handle these kind of situations in the future.  Good luck on this one.

Posted by Bristol Restoration, When you need it done right and done right now! (Bristol Restoration, Inc 661-294-1812) about 8 years ago

You do have recourse!  There are laws that require that all creditors report on credit in certain ways and in writing.  You may have to have an attorney contact this creditor to make them reconsider.  Do ALL contacts in writing and require all contacts in writing by mail or email.  You have been "injured" by their failure to respond in good faith and could possibly open them up for litigation.  DO NOT STOP TILL YOU GET THEIR RESPONSE IN WRITING.  If they report to the credit bureau they are required to answer all inquiries from the credit bureau or the credit bureaus will drop their rating of your credit.

Posted by Ric Mills, Integrity, Honesty, and Vast Real Estate Knowledge (Keller Williams Southern Az) about 8 years ago

sorry to be the bringer of sad tidings, but you just bumped into a money provider who did not want

to do the loan...the reason for a fico/beacon credit score was to allow adjustments for minor credit issues.

There is no credible lender that has fdic coverage as a deposit taker who can legally use that argument

to refuse a loan...there is no such thing as "clean credit" anymore...so the issue was not the credit bureau

although, the party that got paid can be complained to directly to the FTC who regulates the credit agencies...

 

Posted by Alex Morfesis about 8 years ago

If there is proof and provided to the creditor and the credit bureaus then it must be removed

 

now this could/should have been EASILY resolved at the very beginning.

 

When i run credit and see this i work with the borrower ASAP to remove this.

 

This when downloaded via DU to lender would have not come back with an "APPROVE" status it would have come back with a "refer" meaning there is an issue

 

Again though LO should have noticed once credit was run and had borrower work on before loan was even submitted.

 

Some lenders will allow it to be submitted(even though still on credit) as long as proof is in hand.

 

That is something for LO to discuss with AE before even submitting though.

Posted by Dominick Gaccino (Dominick gaccino) about 8 years ago

Deb,

 

Sorry to see that your Client was caught with this catch-22.  Definitely an issue that can come up given current Fannie/Freddie Mac underwriting guidelines.  First off, Lenders need to be running the loan file through their AUS systems as soon as they have a completed application.  The AUS findings will tell you right away if you have a problem.  If it crops up the first solution is to re-run the loan through the Freddie Mac AUS (it is a little more foregiving in regards to disputed accounts).  If it is still an issue all you can do is pound on the creditor who placed the dispute to remove it and hope that your lender is working with a credit provider who can provide the requisite service to help facilitate the credit update.  At this point you hope your Client is working with a knowledgable and experienced Lender (sounds in your case like they are).  Good luck!

Posted by Michael Scott about 8 years ago

The lender isn't accepting a document as paid in full for the disputed amount on the credit report and that's the only reason for denial? You must be the MLO on this transaction, since you're trying to mitigate the challenge, however, if you're not, get your MLO to expedite the validation process.

Melissa, #4 is correct in her comments, and the lender and reporting agencies could be liable for damages to your client. Seek assistance from Attorney Edward Jamison at www.creditcrm.com if you're unable to get immediate action. Best of luck.

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) about 8 years ago

As always the pendulum swings way to far in both directions. The lenders go from giving a loan to anyone who could walk and chew gum at the same time to wanting everything perfect. Where is the happy medium?

Posted by Tom Bailey (Margaret Rudd & Associates Inc.) about 8 years ago

Only FHA and Fannie Mae lenders have this rule, go through a lende that uses Freddie Mac as they don't require this rule. This rule is insane, just another road block for all of us to deal with

Posted by Michael Deery (Citywide Financial Corp) about 8 years ago

Hi Deb,

 

<!--StartFragment-->

Under the Fair Credit Reporting Act (FCRA) passed in 1970, your client has the right to have his credit information reported accurately, and be verifiable. FCRA gives us the right to dispute items we feel have been reported in error. Why do you think this law was passed? Because many credit reports are not accurate and contain errors. The Federal Trade Commission receives more complaints about credit bureaus than almost any other industry.

 

If the account has been paid, it is no longer in dispute. If proven inaccurate when challenged, the bureaus must permanently delete it from the report. A good credit repair company will be able to correct inaccuracies within 30 to 45 days. The US Consumer Credit Restoration Association offers a “Concierge” service for single disputes such as this. There is a good chance they could have saved your deal. Getting this corrected also will give you the opportunity to find them another home.

 

Situations like you are describing are why credit repair or restoration is both legal and ethical. The Credit Repair Organizations Act (CROA) also protects you. If credit repair were illegal, there wouldn’t be a law governing the credit repair industry. As a real estate agent, you can become an affiliate of USCCRA. Helping client’s restore their credit builds client loyalty and referrals. It is a great way to help your clients and build your future pipeline.

<!--EndFragment-->

<!--EndFragment-->

Posted by Doug Kaller (Academy Mortgage, Reno, NV) about 8 years ago

Here we go around the mulberry bush.  If someone who has credit score over 800 and can't get a loan.  There is just no hope for our business.  This is just soooo ridiculous!!

Posted by Lizette Fitzpatrick, Lizette Realty, Lexington KY MLS - Kentucky Homes (Lizette Realty - Richmond KY) about 8 years ago

creditinfocenter.org is a great website to help fight this garbage and if you think this issue is hell please visit loansafe.org and see what some of us are going thru!!

Posted by pamela about 8 years ago

This can be fixed. I refer my clients to a Credit Restoration program called TFC West. Their program does not question the validity of the debt, but the whether or not the credit bureaus have the write to publish negative information about you. According to the Fair Credit Reporting Act sections 609, 610, 611, & 617 they cannot legally publish information about you without physical documented proof such as the original signed note or contract, and payment history. This is a lot of paperwork to keep on file, and since there are millions of consumers out there, they don't have the storage capacity to do so. They get paid to publish information about you by creditors, and don't really give it a second thought. When this information cannot be provided the negative history must permanently come off. 

Now you can spend the $600- and have a professional company do this for you, but most consumers are capable of doing it themselves. It is a process however, takes a lot of diligence and commitment. If this is the road you choose keep a detailed paper trail, and certify all correspondence.

Posted by Brigitte Archer, President (Oxford Capital) about 8 years ago

The credit agencies are as big a joke as our own government.  They are tools of Wall Street and the banks and have little respect for truth or people's rights.  when I refied a home about 9 years ago I had a disputed item on my credit report.  I had one in small claims court on this issue, but still on my credit report.  The insisted I pay them off out of escrow.  They sent me a check to forward to the creditor after closing.  I tossed it, they kept sending it and I kept tossing it.  Finally the title company sent the money to me - I cashed it.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 8 years ago

Pls. remember that the snafus in the credit burros are because the credit burro has low pay low qualifications workers, same reason your appraisals are coming back poorly done. I have a PrePaid legal account, they have written letters for me on their letterhead with 50 +- lawyers on it, has worked for me for 8+ years.

Posted by Truett Neathery (T. Neathery Appraisals) about 8 years ago

Deb, hopefully and you will get this straight in the future. With the recession over business should be picking up shortly HA HA!.

Posted by Frank Rubi, FrankRubiRealEstate.com (Frank Rubi Real Estate, LLC) about 8 years ago

This is a perfect example of why I try to get all my clients to do a review with me on the anniversary of their loan each year.  In this day and age, it's smart to pull your credit at least once per year to make sure there are no errors or problems with it.  If your customers had done this, there wouldn't have been a 6 year old dispute to face at this critical time.  Live and learn ... and do all you can to promote the idea of checking credit reports faithfully and in a timely manner.  Overall, it will help future transactions greatly ...

Thanks for the informative and important post ...

Gene 

Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) about 8 years ago

Thanks for sharing Deb!  I am going to re-blog this because I agree that it's a matter of education for everyone.

Posted by Tammy Pearce, Tammy Pearce (Haute Realty 214-994-6474) about 8 years ago

I'm in agreement with #34 (Gene).  The credit agencies are insane.  I'd like to see something in the law stating that anyone with a credit rating above a certain level (say 720) and/or with an issue below a certain value can't be denied credit.

Posted by Bryan Robertson, Broker, Author, Speaker (Intero Real Estate) about 8 years ago

To EVERYONE that has responded,

Everything you tell me here sounds and seems and should be and probably is valid.  I just had another long conversation with the wonderful, patient and diligent Mtg. Broker who is handling this for us. Her name is Susan Bryant and we will be hearing from her soon. She professes to be a "reader" and not a "writer" but I know she can explain the brick wall we are hitting better than I.

When the lending laws changed this year on April 1st....(APRIL FOOLS)...there was no congruency between the parties. The consumer, the credit agencies and the collection agencies are all dealing with their own changes and we just CANNOT ALL HOLD HANDS.

This is a discrepency that will begin to plauge each and every one of our deals. You are lucky if it hasn't darkened your door yet. I don't wish this upon anyone.

Stay tuned for a finer detailed explanation by Susan.

Will post soon. Deb

Posted by Deb Brooks (Brooks Prime Properties Wichita Falls Texas) about 8 years ago

Sorry Charlie seems to be the answer for all buyers wanting a home and needing financing. Wonder how correcting that might affect the economy... Hmm.

Posted by Bruce Swedal, Denver Real Estate about 8 years ago

Deb - Wow its just ridiculous these days!  That collection agency should be smacked...along with the lender!  I hope you get it resolved quickly for your clients!  Good luck and keep us posted.

 

Posted by Jeanna Martinez (RE/MAX Access) about 8 years ago

GOOD LUCK DEB!!!!!  Vivian

Posted by Vivian Gilbert, ASP, RESA (Home Staging by Vivian LLC) about 8 years ago

Hi Deb,  Interesting post and comment thread.  I also had a very strong buyer where an old late charge ( $29.00 ) showed up so the lender said they would approve the loan but at a less favorable rate ! 

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) about 8 years ago

There was a time where an 800 credit score could have gotten you all of the money a bank had on hand !!!!!!!!!!!!!!!!!!!!!!!!!!

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 8 years ago

By now Melissa has probably helped you find a way to resolve this. Hopefully, filing your own dispute with the credit bureau should clear it up. They'll investigate and the collection agency will have to reply or it item will be removed.

This is a shame. We've had so many bogus companies billing consumers for goods and services not received - you certainly don't have to be a deadbeat to have a bill you didn't want to pay. Health clubs were a good example. My own son got hit with charges on his debit card that he didn't authorize - after he had notified the health club that he was moving and no longer in need of their services. It turns out they required a certified letter - but they refused to pick up certified letters.

At any rate, with the exception of bankruptcy and foreclosure, negative information is supposed to fall off the credit report after 7 years. So you if you have a client with old information that's negative, they need to contact the credit bureau and get it removed.

Wouldn't it be wonderful if we were all people instead of numbers? The mortgage lender does need to be smacked - for not using some common sense.

Posted by Marte Cliff, your real estate writer (Marte Cliff Copywriting) about 8 years ago

Disputed item are a big NO NO if you want to get approved for a mortgage. Too many borrowers with legitimate collection items and derogatory information were abusing this practice. Now, all disputed items must be resolved before a final mortgage approval can be issued.  This is a quote directly from the Fannie Mae Selling Guide:

Disputed Credit Report Tradelines - "Lenders must confirm the accuracy of disputed tradelines reported on the borrower's credit report. If it is determined that the disputed tradeline information is accurate, lenders must ensure the disputed tradelines are considered in the credit risk assessment."

Posted by Rodney Mason, FHA 203(k) & HomeStyle Renovation-AL,FL,GA, SC, TN (On Q Financial) about 8 years ago

You might contact the following attorney that specializes in working the credit bureau's to straighten out problems like this:

STEVE MEYERS, Esq.

440 S. El Cielo Rd., Ste. 3-800

Palm Springs, CA  92262

M:  858-922-2006   Fax:  888-501-3763

Steve@smeyers.com

Hope that can help,

Mark Warner

www.ratewindow.com

Posted by Mark Warner (RealEspace) about 8 years ago

that is really unreal! As if the entire process isn't difficult enough, another glitch in the road - great!

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) about 8 years ago

Yikes, just when you thought it couldn't be any worse.

Posted by Janice Smith (Capstone Real Estate, LLC) about 8 years ago

This exact problem happened to me with a buyer on a house in Point Blank, over by you. I was so mad. What use is a pre-approval, an excellent credit report and great down payment. They did not get the house they wanted. It took 4 months to get the mess cleaned up. Now we are back looking. Good luck! Tell your buyers to keep up the fight and hang in there. They CAN get this fixed.

Posted by Amy Law (Alliance Properties) about 8 years ago

Yes, it is a dispute but it was settled and paid over six (6) years ago! The dispute shows paid but was left on as a dispute!

yikes...

Posted by Deb Brooks (Brooks Prime Properties Wichita Falls Texas) about 8 years ago

Amy, we are going at it full guns! I have some great LL houses in my inventory. Why not come and show some of mine? lol

Posted by Deb Brooks (Brooks Prime Properties Wichita Falls Texas) about 8 years ago

Deb and fellow Active Rainers,

 I recently came across this same situation. My borrower had 4 open tradelines that were disputed. 1 with a balance and 3 without a balance. I have the ability to ask for a clarification from my credit reporting agency and asked about the 3 with no balance. The creditors did not respond back to the credit agency and they removed them. The fourth, was a $1200 balance on an open and active credit card where the borrower had disputed something sometime ago. The borrower paid it off in full and the lender decided that if the disputed items had no balance, there was no issue and signed off on the condition. 

Posted by Robert Amato (Bob Amato of Empire Home Mortgage Inc) about 8 years ago

Robert,

Luckily you had a good response from the lender! These lenders will not budge. We are NOT giving up though!

This war has just begun! lol, Deb

Posted by Deb Brooks (Brooks Prime Properties Wichita Falls Texas) about 8 years ago

Deb,

My only response is 'Wow'. I have now officially heard it all and would run, crawl, swim to a new lender ASAP.

-Brent

Posted by Brent & Deb Wells, Prosper TX (LivingWell Properties) about 8 years ago

I haven't seen that one. 6 years is a very long time for a PAID dispute to hang out there.

Posted by Erica Ramus, MRE, Schuylkill County PA Real Estate (Erica Ramus - Ramus Realty Group - Pottsville, PA ) about 8 years ago

Very troubling story, but I would dispute that the 'dispute' is no longer correct on the report. Because it is no longer correct it should be removed by a supervisor at the credit report bureau.  Stick with the 'it is incorrect' and needs to be removed with a 50 lb hammer.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) about 8 years ago

If you only knew what it takes to get a loan thru.

This is just one of the things you hear about. If a dispute shows up - you have to get on them right away. Takes 2-3 weeks usually to work thru.

Not sure your heart could take it, but if you ever followed a loan thru the system- you would be stunned at what we now have to do and would probably wonder how anyone can gets a approved for a loan now days.

Posted by Ben Yost - 303-587-4297, FHA, VA, Conventional - Mortgage Loans in De (First Time Home Buyer, Mortgage Rates, Pre-Approval) about 8 years ago

THis is the stuff that really makes you crazy. I had to dispute an item when I was ready to buy my house 6 years ago. I know the feeling. I had to wait and buy a different house.

Posted by Lizette Fitzpatrick, Lizette Realty, Lexington KY MLS - Kentucky Homes (Lizette Realty - Richmond KY) about 8 years ago

Here's the deal.  If an account is reporting as disputed, Fannie and Freddie's new guidelines state that the loan must be manually underwritten and the 'automated approval' is not accepted.  Manual underwriting guidelines require much lower DTi ratio's, among other more restrictive guidelines.

 

Yes, the disputes are suppossed to drop off after 30 days but that doesn't always happen.

 

It's not an issue that your borrower's FICO or incoem is good enough, it's a technicality that the govermment entities (GSE's) put in place.

 

 

Posted by Brad Yzermans, Temecula-Murrieta-Menifee FHA/VA Mortgage Lender (First Time Home Buyer & Down Payment Assistance Specialist in So Cal.) about 8 years ago

Underwriting today is a nightmare.  Common sense is out the window, when it comes to things like this.

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) about 8 years ago

I'm almost positive you will get this resolved somehow. Unfortunately, time may not be on your side as far as getting the property your buyer is buying. I remember the hassle of chasing the credit reporting company and going back and forth with the creditor. Good luck!

 

Jane Pacheco

Posted by Jane Pacheco (Pacheco Realty & Financial Services) about 8 years ago

Your buyers are lucky to have a mortgage broker like Susan working for them. It's disheartening that these big credit bureaus won't simply make a few keystrokes to accurately resolve this.

Posted by John Novak, Henderson, Las Vegas and Summerlin Real Estate (Keller Williams Realty The Marketplace) about 8 years ago

Hmmmm....good post. Thanks for getting it out to us today on AR.

Patricia

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) about 8 years ago

Seems to me there should be no way that would still be on the report. Rediculous.

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) about 8 years ago

Deb - I came here from a re-blog from Lizette. I missed the feature but I totally agree. Underwriters are controlling our world. Not only underwriters but appraisers as well.

These buyers that have the high 700's to 800's are flabbergasted when they find they can't get a loan because of a hiccup in their report.

Posted by Ken Barker Realtor® GRI, E-Pro Certified (Dilbeck Real Estate) about 8 years ago

I sure wish clients could report the reporting agencies to the BBB! If they gather the information and disseminate it in the first place, they should be forced to gather and report the updated information, as well.

Posted by Liz Lockhart, GRI, Cape Girardeau Real Estate (Riverbend Realty, Cape Girardeau, MO) about 8 years ago

Try a local bank/lender?  The big boys have their collective head so far up where the sun don't shine that they'll never see daylight without opening their mouths!

I've had more luck on getting construction and permanent loans approved with local banks.

Posted by Mick Michaud, Your Texas Lifestyle is Here! (Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107) about 8 years ago

Yes, Deb, I can empathize with your frustration! I encountered the same obstacle when working with a buyer in Madisonville, TX to purchase one of my listed properties. Although the buyer had sufficient credit score and generally good financials, the file was frozen in the qualification process due to an unresolved dispute that the buyer had initiated against an out-dated, credit-harming "delinquency" on his credit report. I was working with an always-patient Susan Bryant (she's outstanding!) to resolve the matter, and she went the extra mile. In the end, additional requirements from the underwriter ended up capsizing the deal, but I learned an important lesson: never forget to advise Buyers, "Be sure you have no active dispustes on your credit report when applying for a loan, and if you do, resolve them before making an offer on a home!"

I live and work just 25 minutes north of Huntsville in Madisonville, and it's here that I am establishing myself as a forerunner in professional real estate service using the latest tools and technologies to serve Buyers and Sellers (ActiveRain being one of those tools). I hope you'll take a moment to visit my blog. And maybe in the future we can work together thru referrals or co-op sales! Have a blessed day!

Posted by David Companik, Realtor ▪ The WoodlandsTX ▪ davidcompanik.com (Keller Williams Realty - The Woodlands) about 8 years ago

Wow Deb!  This is one I've not encountered yet.  All I can say is your client is soooooo lucky to have YOU as their agent.  Sending you positive thoughts, keep us posted!

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) about 8 years ago

WOW I am glad I read your post!!  If someone has credit issues, it is best to maintain the paperwork that shows it was resolved.  I imagine that creditors have bad records and still come after people even after resolution.

Great Post!  I am re-blogging!  Joy

Posted by Joy Carter & Jeff Booker Brother and Sister Team, Trust Your Family's Move To Our Expertise! (Keller Williams Parkland/Coral Springs Realty-GreatFloridaHomes Team) about 8 years ago

I agree with Todd, we need to find some middle ground.  The banks won't lend although they have a mandate to do so.  And, not many owners can come up with the ability to finance a purchase of their property while trying to get a mortgage on their new living arrangements.  We all need some good answers soon. 

Posted by Don Sabinske, Sabinske & Associates Inc. (Don Sabinske, Sabinske & Associates Inc.) about 8 years ago

I am so sorry, and this is so ridiculous.   It's really too bad.  It seems everybody's looking for an excuse NOT to make the loan.  Are they bitter or something?

Sarah
http://www.ForestHillsTN.net

Posted by Sarah, John Rummage, Love Being Realtors® in the Nashville TN Area! (Benchmark Realty LLC, Nashville TN 615.516.5233) about 8 years ago

I am so sorry, and this is so ridiculous.   It's really too bad.  It seems everybody's looking for an excuse NOT to make the loan.  Are they bitter or something?

Sarah
http://www.ForestHillsTN.net

Posted by Sarah, John Rummage, Love Being Realtors® in the Nashville TN Area! (Benchmark Realty LLC, Nashville TN 615.516.5233) about 8 years ago

MY Goodness. You do everything right and you have the perfect score and something like this rears its ugly head.

I had a mortgage company that was paid off at closing report me 1 month late. When they received the payoff on the 3rd of the month and failed to credit it until the 1st of the next month was unbelieveable. I sent them a copy of the payoff check from the Title company and the copy of the back of the check where they cashed it the 6th of the month they finally agreed to correct the report. They did for a very short time then it appeared again. Now the mortgage company has gone out of business and I sent the copy of the letter they sent me to the credit bureau but they will not drop it of the report even though they have the letter. It is 8 years old and I have never been late on my mortgage so this really makes me mad. So even saving the paperwork doesn't always help.

Posted by Nona Swann, Serving the needs of the Sellers in Brevard County (Swann & Associates Real Estate) about 8 years ago

Ddeb ~ now that is just scary and pitiful at the same time.  Something should be done about the collection agencies and require that when thinks are paid in full the reporting be put in writing.

Posted by Dawn A Fabiszak, The Dawn of a New Real Estate Experience! (Private Label Realty ( Denver metro area, Colorado) about 8 years ago

There is another case for the FICO class action law suit I hope comes about. More damage has occured from underwriters not LOOKING at the borrower's overall picture. The 5 C's of credit to make a decision. Lazy. When I worked for BofA in the early 80's we scored customers based on employment factores , do they have a savings account, own a home, pay there bills, and most customers passed the grade. Now  a 6 year old dispute, that is insane. I hope you went to different lenders as I don't think 3 out of 3 would look at that the same, even in a robotic system.

 

Posted by colleen Bigler about 8 years ago

Me again, Colleen Bigler Loan-Solution Inc.,now logged in. We fund purchase money loans for investors by investors. Ok, hard money loans.  So if you need a quick fix for that denied loan we may be able to help. Southern Calif. Los Angeles areas. No owner occupied. I do think there should be a class action suit against FICO scoring. A person is not just a number he is a whole story, lenders need to look at the big picture. Robots shouldn't be in charge. This to go with previous comment.

Posted by Colleen Bigler (Loan Solution Inc.) about 8 years ago

Deb, those disputes have to be cleared sadly, even the old ones....

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) about 8 years ago

Deb, these kind of things infuriate me!  Why can't these people understand that their lack of concern and silly rules are causing huge problems.  I recently had a client who had a student loan issue on their credit report that was a mistake but could not be resolved to a satisfactory point with one mortgage broker but Wells Fargo was able to do the loan for them without a problem.  Though my clients didn't want to switch lenders in the end it was the only way it was going to happen and the new lender did a fantastic job! 

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) almost 8 years ago

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