VA loan with foreclosed second loan still open.

[Mr. X]

Trying to get a VA loan. My credit is close to being prefect but wouldn’t qualify without Wife income. She has a foreclosure that was
reported as closed 3 yrs. ago and schedule to age off in March 2015. The problem we are running into is that the second loan on that house is still being reported as “180 late” “2^nd Mortgage” for over 5 yrs. Now. Other than these 2 negative, her credit is also prefect, low to no debt, long history,etc. combined income of 100k.

Here the question: Do we have to fix the reporting on the second mortgage first before trying to get a pre-approval?

 

p.s. already sends out the dispute letter to the company and
the 3 CRA.

 

~X

[Brian B The Loan Professor]

Trying to get a VA loan. My credit is close to being prefect but wouldn’t qualify without Wife income. She has a foreclosure that was

reported as closed 3 yrs. ago and schedule to age off in March 2015. The problem we are running into is that the second loan on that house is still being reported as “180 late” “2^nd Mortgage” for over 5 yrs. Now. Other than these 2 negative, her credit is also prefect, low to no debt, long history,etc. combined income of 100k.

 

Here the question: Do we have to fix the reporting on the second mortgage first before trying to get a pre-approval?

 

p.s. already sends out the dispute letter to the company and

the 3 CRA.

 

~X

 

 

 

Yes that will need to be resolved - Were the first and second the same bank? If not the second may not have been a part of the foreclosure and their debt is still showing because of that. I am not sure how that would play out.... (not sure if it would create another 3 year wait after it is resolved??)

[Mr. X]

No they are not the same bank; the second is Well Fargo. I call them and they say that the account was charge off back in May 2010. So I ask them to report the account as being charge off and also wrote them today CRMM asking the same thing. I believe that the second should be reported as closed charge off. And if they say it's still open than it should not be reported as a "2 mortgage" implying that it a secure loan which it's no longer.

 

Any advices? tips?

 

~X

[Brian B The Loan Professor]

No they are not the same bank; the second is Well Fargo. I call them and they say that the account was charge off back in May 2010. So I ask them to report the account as being charge off and also wrote them today CRMM asking the same thing. I believe that the second should be reported as closed charge off. And if they say it's still open than it should not be reported as a "2 mortgage" implying that it a secure loan which it's no longer.

 

Any advices? tips?

 

~X

I would suggest asking in the credit section of the forum - the folks there are the experts in dealing with the bureaus and issues like this - Not that we dont care over here but we know our limits - Good Luck I hope it all works out

[jerelj]

I disputed with all 3 reporting agencies. Reason for dispute, current balance. I wrote correct current balance should be $0. It worked! So try disputing the actual balance instead of it reading charge off, because a lender told me that whatever charge offs and collections accounts I have the balance will have to be paid off or settled if it had a balance. If the second mortgage doesnt have a balance, you shouldnt worry. But I would also ask them to update the charge off to show the date the home foreclosed on. Both my loans were thru bank of america. My primary foreclosed on in March 2011. The second was reporting over 180 days up until April 2013. I disputed with the credit bureaus and called bank of america directly and had a member of the REO department escalate my complaint. I told them I wanted them to update it as being charged off in March 2011 and I wanted the balance to show zero since I am no longer responsible for this and the home has since sold.

 

Good Luck