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Mortgage Lender Told Me My Collections Might Not Fall Off After 7 Years


kkel293
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Hello all. :) I've been reading your forums for a couple of years now, and have become somewhat educated on how credit reporting and the like works. I want to thank all of you for sharing your advice and experiences.

 

I have a nice little group of collections/charge offs that I've been counting on falling off my credit report after 7 years. I have an Experian credit report where I've highlighted all of the dates I can expect these things to be removed. The last one should come off by October of this year.

 

I've decided to begin looking for a mortgage now because I'd like to be ready to go once these things are gone. In the past years I've gotten my credit scores up to (according to the lender's credit pull yesterday) 632 Eq. 684 Exp. 708 TU.

 

I've had two mortgage brokers in my town tell me that since my collection/charge offs were purchased by other lenders, they won't come off after 7 years. I told them I've continuously read that the Reporting Bureaus must remove information after 7 years from the date of the first delinquency--not from the date the debt was sold. They said that's what should happen, but not what DOES happen.

 

The lender is telling me that I will have to pay these collections in order to get a loan. She says she knows what underwriters are going to say, and they'll make me pay the collections off.

 

On top of that, a mortgage lender has pulled my credit, so when I go to try and negotiate with these JDB agencies, they're going to really stick it to me when I try to settle the debt because they'll know I'm trying to get a mortgage.

 

I'm wondering what I should do in this case. I'm thinking that I might want to put off pursuing the mortgage right now until after these collections fall off--and if they don't come off after the 7 years, then I can do some credit repair stuff myself, like asking for the JDBs to provide documentation, etc. All of the old accounts have been sold several times, and I'm sure by now the debt is an entry on a spreadsheet.

 

For those of you who've pursued mortgages with charge offs and collections, what have your experiences been? What do you think I should do in this case?

 

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The lender is telling me that I will have to pay these collections in order to get a loan. She says she knows what underwriters are going to say, and they'll make me pay the collections off.

 

First of all, this is not necessarily true. Is this a local bank or credit union, or are you working with a mortgage broker?

 

Your middle score is 684, which should be enough to get decent terms.

 

I wouldn't assume that waiting is absolutely necessary until you've gotten a second and third opinion about your current qualifications. I also wouldn't assume that you need to pay these off (depending on what they are and how much).

 

Most originators will have a frank conversation with you based on your description of what is in your report. Obviously if you apply, they are going to pull all three bureaus and take a fresh assessment of their own at that time. Make some more phone calls.

 

Also... obsolete disputes (if necessary) are generally pretty easy. And they can usually be done early. Here is a lengthy thread that discusses this topic in detail. https://creditboards.com/forums/index.php?showtopic=521705

Edited by cv91915
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Clearly they are misinformed as it appears to standard reporting. What could be a problem is if your lender runs a Full Factual report...where defaults live FAR longer than seven years and six months from the delinquency. And yes, a lender CAN condition the loan upon payment of outstanding debts even if they are typically old enough to fall off a regular consumer report. Your options at that point are to pay or seek out another lender.

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Thanks to everyone for replying. Thanks for the welcome, breeze! :wave:

 

I am now pouring through the thread on getting charge offs/collections deleted early. Thanks for that link cv91915!

 

I was talking to Fidelity Bank when I was told I'd have to pay off the collections. I'm also in talks with a mortgage broker, but this particular broker has been really slow in getting replies to me. She may try to tell me the same thing. Because I'm just not satisfied with the way this broker is treating me, I may be contacting another broker soon.

 

I'm going to work on getting those charge offs deleted early, but before I do, I have one question before I get started: I have read somewhere (probably here) that lenders do not like to see disputes on CRs. A CR dispute will freeze the mortgage process until the dispute is resolved. I'm understanding that I should address my letters asking for assurance my rights have not been abrogated to the collection agencies and not the CRAs. Am I thinking about this correctly?

 

TIA for reading and offering your advice! :)

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Clearly they are misinformed as it appears to standard reporting. What could be a problem is if your lender runs a Full Factual report...where defaults live FAR longer than seven years and six months from the delinquency. And yes, a lender CAN condition the loan upon payment of outstanding debts even if they are typically old enough to fall off a regular consumer report. Your options at that point are to pay or seek out another lender.

What happens IF they see Judgements? (That don't always report)

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Clearly they are misinformed as it appears to standard reporting. What could be a problem is if your lender runs a Full Factual report...where defaults live FAR longer than seven years and six months from the delinquency. And yes, a lender CAN condition the loan upon payment of outstanding debts even if they are typically old enough to fall off a regular consumer report. Your options at that point are to pay or seek out another lender.

What happens IF they see Judgements? (That don't always report)

They will likely find and judgements in n the title search, but you are always asked about them which you must answer honestly. They do not ask what is in the report but do you have any judgements. You are asking for trouble if you lie on the App.

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Thanks to everyone for replying. Thanks for the welcome, breeze! :wave:

 

I am now pouring through the thread on getting charge offs/collections deleted early. Thanks for that link cv91915!

 

I was talking to Fidelity Bank when I was told I'd have to pay off the collections. I'm also in talks with a mortgage broker, but this particular broker has been really slow in getting replies to me. She may try to tell me the same thing. Because I'm just not satisfied with the way this broker is treating me, I may be contacting another broker soon.

 

I'm going to work on getting those charge offs deleted early, but before I do, I have one question before I get started: I have read somewhere (probably here) that lenders do not like to see disputes on CRs. A CR dispute will freeze the mortgage process until the dispute is resolved. I'm understanding that I should address my letters asking for assurance my rights have not been abrogated to the collection agencies and not the CRAs. Am I thinking about this correctly?

 

TIA for reading and offering your advice! :)

 

If you aren't getting speedy replies and expert service from your mortgage broker you've picked the wrong one. Move on! The last mortgage broker I used responded to emails in three minutes or less during business hours. At night and/or over the weekend he got back to me within 15 minutes.

 

Please talk to a couple more mortgage companies about what you have on your reports before you start trying to clean things up. You may not have to deal with any of this.

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Thanks to everyone for replying. Thanks for the welcome, breeze! :wave:

 

I am now pouring through the thread on getting charge offs/collections deleted early. Thanks for that link cv91915!

 

I was talking to Fidelity Bank when I was told I'd have to pay off the collections. I'm also in talks with a mortgage broker, but this particular broker has been really slow in getting replies to me. She may try to tell me the same thing. Because I'm just not satisfied with the way this broker is treating me, I may be contacting another broker soon.

 

I'm going to work on getting those charge offs deleted early, but before I do, I have one question before I get started: I have read somewhere (probably here) that lenders do not like to see disputes on CRs. A CR dispute will freeze the mortgage process until the dispute is resolved. I'm understanding that I should address my letters asking for assurance my rights have not been abrogated to the collection agencies and not the CRAs. Am I thinking about this correctly?

 

TIA for reading and offering your advice! :)

 

If you aren't getting speedy replies and expert service from your mortgage broker you've picked the wrong one. Move on! The last mortgage broker I used responded to emails in three minutes or less during business hours. At night and/or over the weekend he got back to me within 15 minutes.

 

Please talk to a couple more mortgage companies about what you have on your reports before you start trying to clean things up. You may not have to deal with any of this.

 

 

This is very good advice. I will definitely talk to another broker much more motivated to earn my money. I'll wait to see what my broker says before I possibly do something to delay my process.

 

Thanks so much for your input!

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if you have been letting mortgage lenders pull your reports while you have Collections listed,

 

you have pretty much shot any chance of disputing these off - they see a mortgage inquiry they will stick like glue till the FCRA limits

 

read the pinned topic " your collection Score"

 

if the lenders haven't pulled your reports,

 

triage your reports and file disputes before applying

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if you have been letting mortgage lenders pull your reports while you have Collections listed,

 

you have pretty much shot any chance of disputing these off - they see a mortgage inquiry they will stick like glue till the FCRA limits

 

read the pinned topic " your collection Score"

 

if the lenders haven't pulled your reports,

 

triage your reports and file disputes before applying

 

Yes, I know what you say is true. I shouldn't have gone to a lender before trying to get them off. I guess I'd read a lot about getting mortgages, and I thought I'd read that old baddies didn't really matter if you had several years of current good payment history and your credit score was in a good range. I guess I should have made sure what I thought I'd read was true before I pulled the trigger on a mortgage application.

 

My mistake, and it might slow down my house buying by several months.

 

Are you saying that I'll be able to dispute after the 7 years from the date of first delinquency, or do you agree with the brokers and bankers that if they keep being sold, they can stay indefinitely?

 

Edited to add: I can't find the pinned topic "your collection score." It didn't come up in a search, and I don't see it in this forum. Am I missing something? Nevermind, I found it through a search.

Edited by kkel293
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Okay, I read about collection scores, and I see what I just did by applying for a mortgage. I can expect the CAs and JDBs to descend upon me in 3...2...1.

 

Well, I'm cooling my jets. I'm going to have my you-know-what together and ready for September and October of this year when the negative tradelines are set to be removed.

 

I read something that obviously wasn't accurate and I acted upon it, and now I have to wait a few months because of that mistake. It's okay. I've waited 7 years. Waiting a few more months won't kill me. Sometimes you just have to take your medicine!

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Follow this guide;

https://whychat.me/GUIDEBOOK.html

Opting out will help prevent the CRAs from selling your data to the data miners and keep the JDBs (junk debt buyers) from poisoning your reports when you are applying for a mortgage.

 

Use one of these programs at a time to dispute entries off your reports (wait until you have completed one program before starting on another)

 

HIPAA letter program guide: for all medical accounts

https://whychat.me/GUIDE%20HIPAA%20PROGRAM.html

 

 

SOL Letter Program Guide:for anything else
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I just found the answer to my own question, and I thought I'd post it here. It's the clearest explanation of the FCRA I've found. Oddly enough, it's directed towards information furnishers and not consumers.

 

It's a bit disconcerting that bankers and brokers in my town are so misinformed, but it just goes to show that you have to be your own advocate.

 

https://www.ftc.gov/tips-advice/business-center/guidance/consumer-reports-what-information-furnishers-need-know

 

Delinquent Accounts — When you refer an account for collection and notify a CRA that you have done so, you also must report the date of delinquency to the CRA within 90 days. The date of delinquency is the month and year the consumer's delinquency resulting in the referral began, see the examples below. FCRA 623(a)(5)(A)

If you are a debt collector furnishing information to a CRA about the accounts of a creditor, you must report the date of delinquency given to you by the creditor. FCRA 623(a)(5)(A) This "date of delinquency" determines how long the debt can be reported on a consumer's credit report. Generally, a CRA may report a delinquent debt for seven years from the date of delinquency. If the debt was discharged in bankruptcy, however, a CRA may report it for 10 years.

If the creditor didn’t report the date of delinquency, you have two options:

  1. You may establish and follow reasonable procedures to determine the date from the original creditor or another reliable source, or
  2. If you can’t determine the date, you may establish and follow reasonable procedures to ensure that the reported date of delinquency is a date beforethe account was referred to collection or charged off. FCRA 623(a)(5)( B)

These examples illustrate how to calculate the date of delinquency:

John Smith’s account becomes delinquent in March 2012. The creditor places the account for collection on October 1, 2012. In this case, the date of delinquency is March 2012. The date that the creditor places the account for collection is not the basis for calculating the delinquency date. The collection date is calculated based on the consumer’s delinquency, not the creditor’s later actions.

Mary Myers’ credit card account becomes delinquent in April 2011. Mary makes partial payments for the next five months, but never brings the account current. The creditor places the account for collection in January 2012. Because the account was never brought current during the period partial payments were made, the delinquency that immediately preceded the collection began in April 2011, when Mary first became delinquent. The correct delinquency date is April 2011.

Alan Clark’s account becomes delinquent in December 2010. The account is placed for collection with Collector A on April 1, 2011. Collection is not successful. The creditor places the account with Collector B in February 2012. The date of the delinquency for reporting purposes is December 2010. Repeatedly placing an account for collection or using different collectors does not change the delinquency date.

Lisa Long’s account becomes delinquent in November 2012. The creditor has never reported the date of the delinquent account to the CRAs, but has records indicating the date of delinquency as November 2012. A debt collector acquires the debt and attempts collection. If the debt collector establishes and follows reasonable procedures to learn the date of delinquency from the creditor — and finds that November 2012 is the delinquency date — the debt collector may report that date to the CRAs as the delinquency date. FCRA 623(a)(5)( B)(ii)

Craig Coleman’s account becomes delinquent, but the creditor never reports the delinquency date to a CRA. In addition, the delinquency date can’t be reasonably obtained from the creditor or another reliable source. The account is placed for collection in November 2012. If the debt collector establishes and follows reasonable procedures to ensure that the delinquency date reported precedes the date the account is placed for collection, charged to profit or loss, or subjected to any similar action by the original creditor, the debt collector may report that alternate delinquency date to a CRA. In this case, the alternate delinquency date must be before November 2012. This method should be used only when the original date of delinquency can’t be determined from the creditor or another source. FCRA 623(a)(5)( B)(iii)

Edited by kkel293
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yes that's all correct, the DOFD is the DOFD forever

 

and if the CA's ( I suspect JDB's) ever change the DOFD you can sue them for illegal reaging

 

 

Next time you apply, try different lenders -

 

I have been checking my credit reports, and I'm so glad I've kept copies of them over the past few years. Now that the debt is almost ready to fall off, I've found at least two cases of JDBs re-aging the debt to keep it on there several months longer than it's supposed to be. I wonder if they're doing that in response to my "collection score" showing a mortgage credit pull. I've disputed the tradelines, asking for the dates to be verified and that the account was illegally reaged. One of tradelines have already been deleted.

 

I did find a new lender. For whatever reason, neither of the previous two lenders told me I might qualify for a conforming loan since I have at least 5% to put down. Apparently, these conforming loans don't care so much about old collections, and they work much better for several of my other situations too.

 

However, this lender did say that there was nothing that could be done about collection agencies continually putting zombie debts back onto your CR after they are removed by the CRA. I read him what I'd found on the FTC website. He said that what the FTC website says is completely true, but that's not always what happens. My head almost exploded. I told him it was like me getting robbed every night and the police shrugging their shoulders and telling me there was nothing they could do. Sometimes you lock your door and the robbers just come in. Such is life.

 

He did, however, tell me that what the banker told me--that I'd have to pay the old collections--was the absolute worst advice. As I already knew, paying the collection and bringing the account current would start the 7 year clock all over again. I told him I had NO intention of paying these collections, and that the CRAs and the JDBs might just have to see me in court if they keep resurrecting old debt when the CRAs are removing it because it legally cannot be there.

 

I swear I've been in the Twilight Zone the past couple of weeks with these people.

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Congrats on informing yourself against debt collectors and you are right that there are so many in the business of (mortgage, banking, finance) that are so misinformed about the laws of debt collection. Most of us have been railroaded and taken advantage of by debt collectors, but thanks to "CREDITBOARDS" "NO MORE". I will say that paying a collection agency does not restart the clock over in most cases. Again congrats and continue to empower yourself with knowledge.

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yes that's all correct, the DOFD is the DOFD forever

 

and if the CA's ( I suspect JDB's) ever change the DOFD you can sue them for illegal reaging

 

 

Next time you apply, try different lenders -

 

I have been checking my credit reports, and I'm so glad I've kept copies of them over the past few years. Now that the debt is almost ready to fall off, I've found at least two cases of JDBs re-aging the debt to keep it on there several months longer than it's supposed to be. I wonder if they're doing that in response to my "collection score" showing a mortgage credit pull. I've disputed the tradelines, asking for the dates to be verified and that the account was illegally reaged. One of tradelines have already been deleted.

 

I did find a new lender. For whatever reason, neither of the previous two lenders told me I might qualify for a conforming loan since I have at least 5% to put down. Apparently, these conforming loans don't care so much about old collections, and they work much better for several of my other situations too.

 

However, this lender did say that there was nothing that could be done about collection agencies continually putting zombie debts back onto your CR after they are removed by the CRA. I read him what I'd found on the FTC website. He said that what the FTC website says is completely true, but that's not always what happens. My head almost exploded. I told him it was like me getting robbed every night and the police shrugging their shoulders and telling me there was nothing they could do. Sometimes you lock your door and the robbers just come in. Such is life.

 

He did, however, tell me that what the banker told me--that I'd have to pay the old collections--was the absolute worst advice. As I already knew, paying the collection and bringing the account current would start the 7 year clock all over again. I told him I had NO intention of paying these collections, and that the CRAs and the JDBs might just have to see me in court if they keep resurrecting old debt when the CRAs are removing it because it legally cannot be there.

 

I swear I've been in the Twilight Zone the past couple of weeks with these people.

 

 

This is where the BANKERS have it WRONG on Zombie Debts.

 

Paying it does not bring the account current and on your reports for another 7 years once it's been charged off

 

Legal reaging of the DOFD does happen with original creditors on an open account where you have a few lates and then bring it current

 

the next time after that if you miss a payment it resets the DOFD if the account then is never brought current and it leads to a Charge off

 

Also, CA's who insert debts onto your reports that are past the SOL for lawsuis & past the FCRA reporting limit are not only in violation of the FCRA,

 

they are in Violation of the FDCPA - the FDCPA requires no notice thru the CRA's Dispute process by you,

 

YOU CAN FILE SUIT IMMEDIATELY OR JUST SEND THEM AN INTENT TO SUE LETTER TO GET IT OFF YOUR REPORTS

 

AND IF THE REPORTING CAUSES DAMAGES AND INCREASES THE RATE FOR A MORTGAGE, YOU CAN GET THAT BACK IN A LAWSUIT ALSO

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I was shocked by a full factual report one time. There were things on it I NEVER knew about. Accounts that were 15 and 20 yrs old. I was actually speechless.

 

OK. Details please. What year did you get this in? What CRA provided it?

 

This gets yammered about from time to time but no-one has ever provided proof. The only places old negative info can be had I'm aware of are public record databases. And they are available to anyone. With or without permissible purpose. That's why they're called public records.

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I was shocked by a full factual report one time. There were things on it I NEVER knew about. Accounts that were 15 and 20 yrs old. I was actually speechless.

OK. Details please. What year did you get this in? What CRA provided it?

 

This gets yammered about from time to time but no-one has ever provided proof. The only places old negative info can be had I'm aware of are public record databases. And they are available to anyone. With or without permissible purpose. That's why they're called public records.

The FF showed Rich's and Macy's accounts that had long long fallen off my reports

Back in the 90's. They weren't visible on regular reports that we get from the CRA's but were on that.

I was too shocked to ask if they were supposed to be there.

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I was shocked by a full factual report one time. There were things on it I NEVER knew about. Accounts that were 15 and 20 yrs old. I was actually speechless.

OK. Details please. What year did you get this in? What CRA provided it?

 

This gets yammered about from time to time but no-one has ever provided proof. The only places old negative info can be had I'm aware of are public record databases. And they are available to anyone. With or without permissible purpose. That's why they're called public records.

The FF showed Rich's and Macy's accounts that had long long fallen off my reports

Back in the 90's. They weren't visible on regular reports that we get from the CRA's but were on that.

I was too shocked to ask if they were supposed to be there.

 

 

Specifically, what was the date that the "full facts" credit reports was pulled? Who pulled it and for what purpose? And what CRA, if you know, was the report pulled from.

 

There have been reports of FF type reports pulled but these were several decades ago. The FCRA allows for unlimited time reporting when a report is pulled for transactions of $150,000 or more. However it also (since the 2003 update) requires CRAs to provide consumer reports containing all material information so that consumers can identify and dispute inaccurate accounts. And certain items can be reported indefinitely such as unpaid tax liens for any credit pull.

 

But anything, especially negatives, that are reported must also be provided to consumers. And some things not reported to any potential creditor are required to be reported to consumers.

 

However these are maximums. CRAs may and do have lesser reporting periods. For instance Experian does not report unpaid tax liens past 10 years. It's evident the main CRAs have made a decision to report only the standard maximums and trim even those such as unpaid tax liens.

 

Mortgages are normally well in excess of 150k yet mortgage pulls are done from the 3 majors and these do not contain negative data beyond the normal smaller statutory limits. At least for quite a long time.

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