9 replies to this topic

[warpchant]

Hi, I am thinking of applying for a VA mortgage with Navy Federal Credit Union however I have some pretty ugly credit reports. Middle FICO score of 680. I had filed for Chapter 13 Bankruptcy 4 yrs ago. It was dismissed because my attorney phoned me after the fact and said that he needed additional $$. When he didn't get it in the 2 days he had asked for, he told me that they were dismissing my case. It still shows on report as "dismissed bankruptcy.

I still have several creditors showing as "IIB". Others have "charged off/sold" for a total of 6 accounts. I realize that for a VA loan, they will require me to have these paid prior to approval, correct? Credit cards are Capital One (2 TL), Chase (2TL) and State Farm mastercard. There are no collection agencies for any of these accounts. How do I go about paying these if the OC won't accept payment?

My other issue is that I am on a payment plan from the IRS. I am current and have missed no payments. All of these issues are related to taking care of a parent while they were very ill and I was supporting everyone. I still owe $15,000 but plan to pay it off in the next 12 months.

How do my chances at a VA loan look? Should I check in to FHA as well? I've used my VA loan twice previously to purchase homes and my payment history is spotless. No lates, sold and paid in full.

I recently moved to San Diego and my pay is pretty good but houses are also VERY expensive here. I'm willing to pay everything off but then I'm scared that paying these off
will reduce my credit score even more.

I can provide my income to this post if it will help determine how to proceed. I am not in a HUGE hurry but would like to do this in the next 12 months or so.

Should I go ahead and apply and take care of each item as it is brought forward in the application process? Should I go to a mortgage broker and explain my situation to see if they would pull my credit report and guide me on how to proceed? I have been very lucky with Navy Federal and just refinanced my one year old 4Runner with them in less than 10 minutes.

Any help would be greatly appreciated!

[Aaarrrgggghhhhh]

Since you have an outstanding tax bill with the IRS, I would definitely suggestion you call HUD and make sure that you are not currently on their CAIVERS listing. Typically having an outstanding debt with the IRS will land you on this list (which would keep you from being able to receive another federally backed loan such as you VA loan); however, since you do have a formal repayment plan set up with the IRS, you should be fine, but I would DEFINITELY make sure. Typically the underwriter will check this report right before your loan closing but I wouldn't wait that long because if you are on the list, you can not get the financing. Just my two cents worth.

[warpchant]

Is there any way to pull a CAIVERS listing myself? Some type of online system like viewing my own credit report?

I went ahead and pulled the trigger today with Navy Federal Credit Union. I did the online application and based on my "credit history", I was quoted a 3.5% interest rate. I will not have a funding fee for the VA loan due to my service-connected disability and no down payment. Depending upon what they tell me I may look for a mortgage broker to get a bit more individualized service.

My main goal is to get an application in for pre-approval and work with the lender to correct any issues that would prevent my being approved. I would like to accomplish this in a year or less if possible but I'm in no rush. My poor credit history is my fault and I realize that I will have to work hard to recover from that!

Thanks so much for the reply!

-Jim

[Bucket]

I just closed on a VA loan this past Friday. I had a CO that I paid in March for Cap1 and I had to write a LOE explaining what happened. As I was informed by my LO, the UW likes to see 1 year of good credit after any period of bad credit. I also had a repo that reported as a CO that I settled at closing. I had to contact the CA and get it in writing. All the OCs that I had COs with, which includes Cap1, First Premier, and Amex, I contacted earlier this year to pay off because I knew it would increase my score and the likelihood of me getting approved for a VA loan.

[snowpuppy]

Get IRS taken care of first. You'll never qualify for a Federally backed mortgage while owing the Fed. You're likely in CAIVRS, it's a database for government debt. That said, make sure any other debts are clear such as anything you might owe the VA (even small medical bills), gov't student loans, etc.

DON'T pull the trigger and apply for a mortgage while cleaning. NO ONE will bargain with you such as a PFD when they see those mortgage pulls.

Do the clean up first, beginning with IRS and then go forward. Post your other credit issues in the main forum.

[VA loan source]

Is there any way to pull a CAIVERS listing myself? Some type of online system like viewing my own credit report?

I went ahead and pulled the trigger today with Navy Federal Credit Union. I did the online application and based on my "credit history", I was quoted a 3.5% interest rate. I will not have a funding fee for the VA loan due to my service-connected disability and no down payment. Depending upon what they tell me I may look for a mortgage broker to get a bit more individualized service.

My main goal is to get an application in for pre-approval and work with the lender to correct any issues that would prevent my being approved. I would like to accomplish this in a year or less if possible but I'm in no rush. My poor credit history is my fault and I realize that I will have to work hard to recover from that!

Thanks so much for the reply!

-Jim

CAIVRS is not available to unauthorized users, so you would not be able to access the system.

Here is the VA guideline on Federal Debts, even though individual lenders may have their own guidelines:
An applicant cannot be considered a satisfactory credit risk if he or she is presently delinquent or in default on any debt to the Federal Government until the delinquent account has been brought current or satisfactory arrangements have been made between the applicant and the Federal agency.

[warpchant]

Wouldn't the payment plan be considered satisfactory arrangements?

I have never missed a payment and am getting close to being finished. I am going to try and call the IRS soon and see if I can get them to waive the penalties which would save me about $3000. I know they cannot remove the interest.

thanks again!

[Ssis002]

Although I am new and I can't help too much, I can add that I had a CO with Chase also. I emailed them (found it on Google) a GW and it was gone in a matter of days. I would give that a try.

[warpchant]

Thanks for the responses everyone. I probably screwed myself but I applied for a mortgage with Navy Federal. It took them 5 days to get back to me and I was denied. To be honest, I did not expect an approval but wanted to float the mortgage balloon to see which collection agencies would come out of the woodwork. So far, one week later, I've gotten no additional inquiries nor new activity.

I think one thing that may have contributed to the denial was a previous mortgage that lists as "disputed by consumer" on all 3 credit reports. In a super bad decision 1-2 years ago, I hired Lexington Law to help clean up credit report. They disputed EVERYTHING! The only thing to dispute on this account was one "30 day late" payment. All other payments on time.

I've tried to call Citimortgage to have this dispute removed. I spoke with customer service (in India) and they told me that I had to either write or fax a letter to ask them to remove the dispute. I will be doing this tomorrow.

I guess my main question is.....would the "in dispute" for a mortgage account cause the underwriters to deny the application? I know it's not my income. I'm actually glad that I pulled the trigger and now I can work for the next year to get me to where I want to be. I have the ability to pay several old collections (hoping for PFD) if VA requires everything to be paid.

Would you suggest that I get with a mortgage broker to work on improving my credit to a point where I would be approved? I will be using VA loan.

Thanks again for all your help, I love this site!

[warpchant]

Okay, so I'm trying to get the "in dispute" comments removed from my credit reports. Experian removed it immediately, Transunion is working on it. Equifax, on the other hand is telling me that they cannot remove the "customer disputes" comment because it was placed there by Citimortgage. I called Citimortgage to have them remove it. I had to call several times until I reached someone who spoke English and was told that I have to fax the request. So that's where I'm at.

I'm just really concerned that this is the reason I was not pre-approved with Navy Federal.

Would appreciate any input as to the weight of this notation to a previous mortgage, thanks!