Disputed accounts on Your Credit Report are now a problem!

Mortgage and Lending with www.DaveYourMortgageGuy.com - Legend Lending NMLS #293883

Recently, Mortgage Underwriting Guidelines have changed.  You can no longer have a disputed account on your credit report and get approved for a mortgage.  It must be removed, in order to get approved.  When you have a disputed account it is taken out of the scoring model, causing the underwriter to not get a fair and complete picture of your credit situation.  You must get this disputed account removed before the file goes into underwriting or before you can close on your mortgage.  Keep in mind the process of removing a disputed account can take 30-60 days.  Here is my suggested process to remove a disputed account:

  1. Write a letter to the credit agency asking them to remove the language stating the disputed account.  Please understand that the process of investigating the account can take 30 days in itself.
  2. At the same time that you are doing #1, you will also want to write a letter to the creditor(that you are disputing) stating "that this account is no longer in dispute" and to remove it.
  3. The next step is to WAIT!  You do not want to hound the creditor or agency, or send more then one request.  When you send another request it can start the process all over.    
  4. Pull a new credit report 35-40+ days after you do #1 and #2.  At this time hopefully it shows the account is no longer in dispute 

Fannie Mae, Freddie Mac and HUD(FHA) have all adopted this new guideline.  Keep in mind that if this disputed account is not caught until a file is in underwriting, it could cause your closing to be delayed or worse case you could get denied for your mortgage.  Please call or email me with any questions. 

UPDATE: I am now able to update your disputed account quicker, then the above options.  The credit report company I use will contact the credit bureau and the credit company that you have a dispute with.  This will greatly speed up the process.

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David Krichmar 

Mortgage Banker NMLS#293883 

Legend Home Lending

LLC NMLS #229421

Has Written For Realtor Magazine, Houston Agent Magazine, Scotsman Mortgage Guide

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Named 5 Star Mortgage Professional 2013, 2014, 2015, 2016, 2017

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Patrick A Sciaroni

Great info! A couple of additions:

IF the borrower has gone to annualcreditreport.com in the last year, then the bureaus have the right to respond in up to 45 days.  The 30 day investigation period is not indelible.

Many credit vendors, including Old Republic and others, will allow a cusotmer to fill out an affidavit explianing that the account is no longer in dispute and that the cusotmer accepts responsibility for the account. 

It is your right to dispute the accuracy of any item on your credit report, although doing so can cost you a mortgage! I had a customer who had a tax lien out of the state of Nevada when he was 8 years old, clearly some good people are being denied loans for executing their right under the Fair Credit Reporting Act.  Thanks for the tips David!

Jun 08, 2010 05:43 AM #1

I am currently in the process of closing on my dream home, but my loan has been delayed due to accounts notated as previously disputed. i am not having any luck with removing the notes and it's been over 2 months.

Does anyone have any suggestions?

Jul 13, 2010 06:21 AM #2
David Krichmar
www.DaveYourMortgageGuy.com - Legend Lending - Sugar Land, TX


patrick's comments above are very helpful.  i personally would suggest that your mortgage professional should help you with this.  You will also want to contact the credit company you have the account with and explain that is is no longer disputed.  I hope this is helpful. 


Dave Your Mortgage Guy

Jul 13, 2010 06:26 AM #3

I am trying to get a Refinance to take advantage of the lower rates and I was side-smacked with this.  This seems like a scene from "Dumb & Dumber", I cannot believe it.  The bankers loose our money and they get a bailout.  The Feds freak out and now Fannie Mae, Freddie Mac has a bunch of ridiculous rules.  When will the insanity end?  With my excellent credit and income I cannot image that other citizens in more complicated scenarios could stand a change on getting a Mortage.

Jan 12, 2011 02:28 PM #4
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