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in4maous

Chase Credit Card Chargeoff

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Ok, so I have read the threads and it’s nearly impossible to PFD a Chase charge-off. I have 3 and the balances are over $2k each.  I am looking to buy a house soon and I understand all charge-offs should be removed before an underwriter will approve. Below I have few questions and all comments and assistance are greatly appreciated.

 

1. What is the impact to my score if I do settle?

2. Can someone provide me or direct me to a settlement letter that worked?

3. What is the remark I should request to include on my credit report?

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a paid charge off is terrible for your scores. how old are the debts? are they out of SOL>?

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4 hours ago, in4maous said:

Ok, so I have read the threads and it’s nearly impossible to PFD a Chase charge-off. I have 3 and the balances are over $2k each.  I am looking to buy a house soon and I understand all charge-offs should be removed before an underwriter will approve.

Has an experienced mortgage professional reviewed a prequal application and advised you of this?  

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Posted (edited)
1 hour ago, cv91915 said:

Has an experienced mortgage professional reviewed a prequal application and advised you of this?  

Agree^

 

And, they may not need to be removed, but they will likely need to be paid, or notated as such.

Edited by CTSoxFan

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No, it has not been reviewed by a mortgage professional.  I am afraid to get a hard pull to reduce my score.  My mortgage fico is 595, and the charge-offs are hurting my scores based on my own analysis. 

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6 hours ago, hegemony said:

a paid charge off is terrible for your scores. how old are the debts? are they out of SOL>?

The debts are 5 years old now.

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27 minutes ago, in4maous said:

No, it has not been reviewed by a mortgage professional.  I am afraid to get a hard pull to reduce my score.  My mortgage fico is 595, and the charge-offs are hurting my scores based on my own analysis. 

Your fear is your immediate obstacle.  Don't speculate about what needs to be done.  Have someone with experience tell you.

 

Also, you are significantly further away from attractive terms than the handful points that an inquiry may or may not cost you.

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44 minutes ago, in4maous said:

I’m in Illinois. What is the SOL, 7 years + 180 days?

SOL is in regards to a defense if you are sued.

 

7+180 is in regards to the FCRA reporting to the four major CRAs

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You might not want to get a hard mortgage inq.  If you are within state SOLs (5 years there, I believe) then the mortgage inq is like raising a red flag in front of a bull. For that matter, just negotiating to pay off the accounts, which may be required, is harder if they know you are seeking a mortgage. They have you by the short and curlies.

 

So, as suggested above, get some professional advice from someone that will take your credit report and score printouts w/o pulling anything hard.

 

Probably a good idea to plan on renting for a few years and taking measures now that will help your credit after the negatives fall off.

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38 minutes ago, cashnocredit said:

You might not want to get a hard mortgage inq.  If you are within state SOLs (5 years there, I believe) then the mortgage inq is like raising a red flag in front of a bull. For that matter, just negotiating to pay off the accounts, which may be required, is harder if they know you are seeking a mortgage. They have you by the short and curlies.

 

So, as suggested above, get some professional advice from someone that will take your credit report and score printouts w/o pulling anything hard.

 

Probably a good idea to plan on renting for a few years and taking measures now that will help your credit after the negatives fall off.

Will an underwriter consider me paying off the chargeoffs at the closing table?  

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36 minutes ago, in4maous said:

Will an underwriter consider me paying off the chargeoffs at the closing table?  

Also, what can I do to improve my mortgage fico score other than decrease my utilization?  It’s currently at 40% and my FICO scores are 640+, which doesn’t mean anything if the mortgage FICO is the score used

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You won't get to the closing table until the underwriter approves the loan. And that generally requires proof that the debts shown on your reports have been paid.

 

You clearly have your heart set on buying a home but, even if possible, you are going to pay through the nose. Consider and plan for the longer term.

 

More details are needed for peeps to give the best advice. Were the chargeoffs sold to collectors? If so the Chase report should show 0 balance (because the debt was sold and is no longer owed to Chase) and the debt balance will be shown by the collection company.

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Posted (edited)

Given OP's credit situation I am going to assume that OP is considering an FHA loan (OP, please don't do this if you have almost nothing to put down and/or you have to pay MIP/PMI, but that's another story).

 

FHA makes it pretty easy for people to hang themselves with mortgage debt. 

 

If OP is hellbent on getting a mortgage, OP should consult with an originator who is experienced with FHA loans (or similar subprime programs) before taking any action.

 

There are hundreds of links online describing what FHA will or won't overlook.  Here is one, but I'm not qualified to say if this is a correct summary for OP's situation, or for anyone's for that matter... because I don't do this for a living. 

 

Offered as food for thought:

 

https://www.ovmfinancial.com/fha-collection-guidelines/ 

Edited by cv91915

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5 hours ago, Why Chat said:

Follow the guides;

https://whychat.me/GUIDEBOOK.html

 

https://whychat.me/SOL PROGRAM GUIDE.html

 

The Illinois SOL is 5 years commencing on the date of default which would be the Month following your last on-time payment.

https://whychat.me/States/state-ill.html

 

17 hours ago, cashnocredit said:

You won't get to the closing table until the underwriter approves the loan. And that generally requires proof that the debts shown on your reports have been paid.

 

You clearly have your heart set on buying a home but, even if possible, you are going to pay through the nose. Consider and plan for the longer term.

 

More details are needed for peeps to give the best advice. Were the chargeoffs sold to collectors? If so the Chase report should show 0 balance (because the debt was sold and is no longer owed to Chase) and the debt balance will be shown by the collection company.

Chase still holds the accounts and they have not been sold to a CA.  

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5 hours ago, Why Chat said:

Follow the guides;

https://whychat.me/GUIDEBOOK.html

 

https://whychat.me/SOL PROGRAM GUIDE.html

 

The Illinois SOL is 5 years commencing on the date of default which would be the Month following your last on-time payment.

https://whychat.me/States/state-ill.html

Why Chat, since I am at the 5 year mark.  Submitting your letter to the creditor and CRA will work to remove it from my reports?  Sorry, if it may sound like a dumb question, but I need to get this resolved.  Thanks

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You start by opting out and deleting old addresses (if you have moved since defaulting.

The initial letter is to the CRAs (the credit reporting agencies, ie Equifax, Experian and TransUnion where the account is appearing on your reports. The letter ;

https://whychat.me/initdispltrsol.html

Should be used with the UNDERLINED phrase if it is being reported by the OC (original creditor)

 

This will likely get the account deleted from your reports.

 

If it does not then and ONLY THEN do you communicate with the creditor.

Although the dispute letter as written is basically for Collection Agencies, it is also valid for original creditors.

 

It is against the FCRA ( Fair Credit Reporting Act) to report an account to the CRAs that is no longer legally collectible.

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49 minutes ago, Why Chat said:

You start by opting out and deleting old addresses (if you have moved since defaulting.

The initial letter is to the CRAs (the credit reporting agencies, ie Equifax, Experian and TransUnion where the account is appearing on your reports. The letter ;

https://whychat.me/initdispltrsol.html

Should be used with the UNDERLINED phrase if it is being reported by the OC (original creditor)

 

This will likely get the account deleted from your reports.

 

If it does not then and ONLY THEN do you communicate with the creditor.

Although the dispute letter as written is basically for Collection Agencies, it is also valid for original creditors.

 

It is against the FCRA ( Fair Credit Reporting Act) to report an account to the CRAs that is no longer legally collectible.

Ok, so the date of my last payment was 6/16/2014 and I can submit this letter to have the chargeoffs removed?

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55 minutes ago, Why Chat said:

.It is against the FCRA ( Fair Credit Reporting Act) to report an account to the CRAs that is no longer legally collectible.

Um.

 

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Posted (edited)

Ok, so the date of my last payment was 6/16/2014 and I can submit this letter to have the chargeoffs removed?

 

Yes.

 

The FCRA requires accuracy in reporting.

Requirement to form a reasonable belief – 12 CFR 1022.82(c) A user must develop and implement reasonable policies and procedures designed to enable the user to form a reasonable belief that the consumer report relates to the consumer whose report was requested, when the user receives a notice of address discrepancy in connection with a new or existing account. The rules provide the following examples of reasonable policies and procedures for forming a reasonable belief that a consumer report relates to the consumer whose report was requested: 1. comparing information in the consumer report with information the user: a. has obtained and used to verify the consumer’s identity as required by the Customer Identification Program rules (31 CFR 1020.220); b. maintains in its records; or c. obtains from a third party; or 2. verifying the information in the consumer report with the consumer. Requirement to furnish a consumer’s address to an NCRA – 12 CFR 1022.82(d) A user must develop and implement reasonable policies and procedures for furnishing to the NCRA an address for the consumer that the user has reasonably confirmed is accurate .

OCs (original creditors) are exempt from the provisions of the FDCPA, however when a very old (beyond SOL) account is being reported ONLY by a CA it is reasonable to assume that the account is no longer in their active computer system and therefore when the e-oscar "matching" inquiry is sent to the OC from the CRA it will "bounce back" and will therefore be deleted as they would not have current data to use.  THIS IS ALSO WHY YOU SHOULD NEVER CONTACT AN OC ON ANY ACCOUNT BEING REPORTED PAST SOL AS IT MIGHT REACTIVATE THEIR COMPUTER RECORDS AND RESURRECT THE ACCOUNT FROM THEIR ARCHIVES 

Edited by Why Chat

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3 hours ago, Why Chat said:

It is against the FCRA ( Fair Credit Reporting Act) to report an account to the CRAs that is no longer legally collectible.

 

I'm sure you're on your game here.  But it's not clear to me what "no longer legally collectible" means exactly.  I'd prefer to sere the language used by the FCRA.  I gather we're talking about something more than just out of SOL.

 

You go on to cite an example where a debt is reported by a CA, but the OC debt is no longer on the report.  Is this the specific instance that this comment is applicable to?  Does it matter whether the debt was just referred to the CA or actually transferred (sold) to it?

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Once the debt is beyond the SOL, that is an absolute defense against being sued. Their lawyers also face the possibilty of a countersuit for FDCPA / state violations. If you cannot successfully be sued, I don't see why any bank would want these things paid off. That has nothing to do with the FCRA.

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15 hours ago, hdporter said:

 

I'm sure you're on your game here.  But it's not clear to me what "no longer legally collectible" means exactly.  I'd prefer to sere the language used by the FCRA.  I gather we're talking about something more than just out of SOL.

 

You go on to cite an example where a debt is reported by a CA,, sorry I meant OC not CA-- senior moment!! but the OC debt is no longer on the report.  Is this the specific instance that this comment is applicable to?  Does it matter whether the debt was just referred to the CA or actually transferred (sold) to it?

 

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