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Credit Card Companies do it again....

By
Mortgage and Lending with Jamie Russen - Greentree Mortgage NMLS ID #95705

This is another  thing for all of us  to look out for. A co-worker of mine was working with a couple who are looking to  buy their first home together. They credit was run and they both had very solid mid 680's fico score. They submitted their income and asset documentation and were qualified for the amount of a home that they were interested in.

They found a property and actually got under contract. Once the contract was turned into our company, since 30 days had elaspsed a new credit report was needed. ( Requirement of FHA  - since the date of the credit report was 30 days prior to the sales agreement - a new report is needed ).

One of the borrower had a credit card through Wells Fargo. ( Yes, I'm putting their name out there ) Her credit limit was $5500 and her balance was $3700. They cut her credit limit down to $3500. This now put her above her credit limit which can destroy a credit report. This dropped her 65 points into the low 620's. She is  going to have to pay her balance down almost $1,500 and then have a new report pulled in hopes that the scores will update. Of course this was money that they were not planning on spending before buying their first home.

Just another thing to add to the list that we all have to keep an eye out for!

Just had to share this story and see if any of you had anything similar happen with these creditors

Show All Comments Sort:
Nicole Arsenault
Huntsville Houses For Sale (Level 10 Realty) - Huntsville, AL
Huntsville, AL Real Estate

Great advice and not a situation that you can typically plan for.  I hate it for your buyer...

Feb 04, 2011 04:54 AM
Henry Pailles
Chula Vista Realtor,Short sale,Eastlake Real estate,Realtor - Chula Vista, CA
San Diego Real Estate, San Diego Realtor, Chula Vista Real Estate

Great blog Jaime.

It is amazing how banks not only have proven to be the main source of the economic meltdown that our Nation suffered, but we have bailed them out and they keep on bitting the hand that feeds them. Unfortunately as they say, he who has the money makes the rules.

Feb 04, 2011 04:56 AM
Art Hademan
Century 21 Real Estate Center - Mount Vernon, WA

Jamie,

It was my grandfather, when I was about ten years old, who told me never to trust a bank. That was in the 50's and grandpa had most of his money in coffee cans in his back storeroom. He owned his on business outright and didn't have any creditors. He paid cash for everything!

That's stretching it a bit by today's standards but the meaning of his statement is still valid.

They (the banks) are in business to make money. So are you. They don't care one bit about your credit scores, credit rating or standing in your community. They're only in it for the money.

Keep one credit card for emergencies and pay cash for everything else. Remember, if you can't pay cash for it then don't buy it.

HOW HARD IS THAT?

Feb 04, 2011 04:57 AM
Brenda Whitman, Live in Laramie Real Estate
Live in Laramie Real Estate, Laramie, Wyoming - Laramie, WY
Broker/Co-Owner, Laramie, Wyoming

I agree,  it seems that the concept of credit is so ingrained that people have forgotten that credit shouldn't be a way of life.  And back to the original post - it seems odd that a bank can lower someones credit to less than what they already owe based on a previously higher credit limit.  That just doesn't seem right!

Feb 04, 2011 08:07 AM