Disputes on credit continue to be a problem for borrowers

By
Mortgage and Lending with Florida Mortgage Solutions

For some reason lenders aren't doing loans with clients that have even the smallest disputes on their credit; even if they owe nothing on the account. There is one lender I found that will make an exception, but that is only case by case and takes a bit to get approved. We have found several ways that we can remove the disputes, so call me if you have any issues with your loans, but the point is to make sure your broker is on the lookout for disputes.

Hope this helps and have a great weekend!!!

Comments (7)

Margo Currie
Exit 1 Stop Realty - Saint Augustine Beach, FL

It seems to be getting more and more difficult for buyers to get money, and so many have past credit issues.

Sep 25, 2010 04:42 AM
Robert Amato
Bob Amato of Empire Home Mortgage Inc - East Meadow, NY

Pablo,

 There was a previous posting this week on this subject. Most of my lenders are of the thought that if there is a zero balance on the disputed item they did not care. One of my past borrowers even paid off a $1500 balance on a credit card just to close the loan. 

Sep 25, 2010 04:48 AM
Eric Kodner
Madeline Island Realty - La Pointe, WI
CRS, Madeline Island Realty, LaPointe, WI 54850 -

The credit scoring system in this country is so badly in need of reform, it's ridiculous.  We bailed out lenders so they would regain confidence and it would induce them to lend.  But with credit scoring making it impossible for the vast majority to qualify, those efforts to restore lending are useless.

Sep 25, 2010 04:54 AM
Pablo Samsing
Florida Mortgage Solutions - Weston, FL

Hi Empire Home!

  Yes, that is true they can do it with a zero balance but the restrictions are tighter; ie lower DTI's and/or manually underwritten is the norm. Like I said there are some that allow it on a case by case basis, but it's become an issue that everyone should be aware of.

Take care!

Sep 25, 2010 05:19 AM
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Unless the dispute is resolved prior to closing, we have to sell the loan direct to Fannie Mae.   The Secondary Market views it as too great of a risk.

Sep 25, 2010 05:23 AM
Harry F. D'Elia III
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

Mortgage professionals need to consult with borrowers on how to obtain a conventional mortgage. That means pointing them in the right direction when it comes to their credit scores.

Sep 25, 2010 06:00 AM
Pablo Samsing
Florida Mortgage Solutions - Weston, FL

We try to service the customer and teach them how to improve their credit for the purchase and how to keep it high for the rest of their life.  There some simple rules to live by and most people do not know about it.  For example:

1. Paying off all of your debt will not make your credit score perfect. A credit report is exactly that, a report that shows how responsible you pay your "reported" bills. ( most people don't know that the water and cable bill do not affect your score...unless you don't pay them at all, then it becomes a colleciton )

2. You have to have several tradelines open ( credit cards, gas cards, Macy's card etc ) and keep a balance of 20-30% of that specific credit card limit. If you don't have good enough credit, get a secured credit card from your bank.

3. The biggest hits against credit are the largest debts; kind of obvious. So if you are going to be late, be late on the water bill, power bill but not your house payment, car payment or credit cards; which are reported to your credit.

There are other things to look for and I will post a full blog on it, but these are the basics. With counseling and certain actions you can actually get your credit score up as much as 70-80 points in a week.   If you want more details on it, call me or wait for the blog.

Thanks everyone for your input!

Sep 25, 2010 06:19 AM