Credit is harder than folding a map!

[Westernacc]

I currently have a situation that I need advice on, before begging you guy's for problem specific guidence.

Basic background. Until about 2.5 yrs ago I did not know about my rights, credit repair ectra. I did the Lex Law thing..I Know..12months at 60$ They did get a little off but left me with no paper trail, no idea where I was in disputes ectra. I found Art of Credit shortly before they dissapeared but long enough to get rid of Lex. more later..

Current Situation: The wife and I have been trying to get a 1 time close mortgage for constuction, The Broker we have been dealing with called today said we are a "level 1" ?? and that they may need all past unpaid debt to reflect paid on our CR's and that He would be willing to help negotiate for "pennys on the Dollar" to show paid. I didnt feel comfortable with that.

Most all debt received while on 2.5 yr stint in Colorado, Texas resident agian since spring 2002.

Basic Credit. Me EQ 621, EX698, TU641 Exemplory pay history since2001 Several medical CA's all wifes procedure covered by Cigna at the time, I dont remmember signing anything exept possibly as "person to notify" these show delinquent around 2002. Never ever a peep on this debt from OC or CA just tradelines. 1 Cap1 charge off paid for less than full balance. 1 Providian, West ASSt (will get to this on another post) re-age. almost all 2002 or older.

Wife EQ 600,EX 629, TU 554. Basically same as mine, with addition med related to same incident, 1 college loan (for later post) 1 cap1 chargeoff.

Basic question: Based on what the broker said, whats yr opinion at a glance?
We have stuggled with credit issues for yrs and now I can generally buy what we need, but are accustomed to live without certian perks so holding off a year would not kill us. I am leary to pay around 10-12,000 bucks just to have a construction loan facturing SOL's, 7 yr waiting, and possible deletion by other means, basicaly what hes saying is put that debt on the mortgage and finance it for 15 -30 yrs

I know this isnt much to base an assertion but I have to start somewhere any request for clarifications or additional info I will glady submit.
At a glance whats your thoughts?

Thanks very much,
Western
Posted also on CNET

[Pale Rider]

Quote:

Originally Posted by Westernacc Basic question: Based on what the broker said, whats yr opinion at a glance? We have stuggled with credit issues for yrs and now I can generally buy what we need, but are accustomed to live without certian perks so holding off a year would not kill us. I am leary to pay around 10-12,000 bucks just to have a construction loan facturing SOL's, 7 yr waiting, and possible deletion by other means, basicaly what hes saying is put that debt on the mortgage and finance it for 15 -30 yrs

My thoughts are to tell this "broker" to cease all activity, including the pulling of any credit reports for themselves or any other lender they may be assocaited with, then running very fast in the opposite direction. Paying may or may not restart SOL. The bigger problem will be your score tanking about 100 points or more because of the way the current status will be reported, leaving you with not qualifying or paying much higher interest for that 30 year period. This was unsecure debt in the first place. Why would anyone want to put their home at risk over it. If he can negotiate for pennies on the dollar to show "paid", which is what is required by law anyway, why can't he negotiate for a few more pennies per dollar for a deletion?

You need to pull all 3 reports and interview other brokers, not allowing them to pull their own copy, and see if you can make the loan without paying anything...

or, wait a year to year and a half, and start with a clean report, taking the chance that interest rates may rise.

[Westernacc]

Thanks for the reply, I think I remmember you from AOC ??
This is the 5th broker, a friend of the family whos has done several mortgages for other fam members, BUT he still is a broker.. So far he has offered the best deal as far rates ect tra. The sad thing is I can Buy a house around DFW with current credit/income and those meds never where brought up, Problem is I have 15 acreas and we want to build. I too am sceptical, theses debts are over 5 yrs old +, I may be better to try removing the TL's or waiting like you say

Do you think since they never dunned or ask for payment, just put it on my credit that I could still DV? also possible to find out why cigna didnt pay, or maybe they did and they are double billing. Dont know if I should let old dogs lay or start a pre-emtive strick??

Thanks agian

[jlynn]

If it were me, I would start a preemptive strike and send blind DV's. Are these OC's or CA's reporting these debts? Or a combination? First, since you are in TX, I would study up on Chapter 392 of the TX Finance Code - it will be your guide.

[centex]

Concur with Jlynn...ANYONE in Texas or dealing with an agency in Texas needs to learn what TFC392 provides and why it beats the hell out of any federal statutes associated with reporting and collection. The companion reader is Chapter 17 of the Business and Commerce Code.

[roybean]

We have Quixote on our site and he is very good and knows his stuff. Look over in real estate and and send him an email.

[Pale Rider]

Quote:

Originally Posted by Westernacc Do you think since they never dunned or ask for payment, just put it on my credit that I could still DV?

Here is the Texas Finance Code CH 392. Learn it. Know it. Live it.

http://tlo2.tlc.state.tx.us/statutes...htm#392.001.00

As for the FDCPA, the clock does not start ticking until you receive the notice.

809 (a) (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and


809 (b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#809

[Westernacc]

Thanks a bunch guys, I remmember some of you from AOC and respect your valued thoughts. I have read the TCP and will re RE read it as you suggest.

All of our reports are CA's as best we can tell, On my new MYFICO CR's, they list them by ## so the only references I have is old CR's from 2005.

Thanks also for the clarification on DV's, That was they way I was interpiting it since only notice for the majority of TL's is a TL??

All but 2 of the TL's (both mine and dw) are from CA's in Colorado where we lived shortly, but have lived In Texas since about June 2002, Would I fall under Texas laws fully even though the debts arose while living in CO?? Not sure when the TL's where put on, but it was prior to 2005 when I 1st started with Lexington..(I KNOW, AOC got me out of that)

Lastly if you folks dont mind, I will be more TL specific and ask for opinions and comments prior to action and also advise any progresses, remidies or successes I have that may help some one else or confirm strategies, at a later date.

I have to let the broker know Monday so I have alot of reading to do..lol

Thanks very much
Western

[Pale Rider]

Quote:

Originally Posted by Westernacc All but 2 of the TL's (both mine and dw) are from CA's in Colorado where we lived shortly, but have lived In Texas since about June 2002, Would I fall under Texas laws fully even though the debts arose while living in CO?? Not sure when the TL's where put on, but it was prior to 2005 when I 1st started with Lexington..(I KNOW, AOC got me out of that)

§ 811. Legal actions by debt collectors [15 USC 1692i]

(a) Any debt collector who brings any legal action on a debt against any consumer shall --

(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity --

(A) in which such consumer signed the contract sued upon; or

(B) in which such consumer resides at the commencement of the action.


--------------------------------------------------------------

§ 16.004. FOUR-YEAR LIMITATIONS PERIOD. (a) A person
must bring suit on the following actions not later than four years
after the day the cause of action accrues:

(3) debt;

http://tlo2.tlc.state.tx.us/statutes....htm#16.004.00

-------------------------------------------------------------


§ 16.067. CLAIM INCURRED PRIOR TO ARRIVAL IN THIS
STATE. (a) A person may not bring an action to recover a claim
against a person who has moved to this state if the claim is barred
by the law of limitations of the state or country from which the
person came.

(b) A person may not bring an action to recover money from a
person who has moved to this state and who was released from its
payment by the bankruptcy or insolvency laws of the state or country
from which the person came.

(c) A demand that is against a person who has moved to this
state and was incurred prior to his arrival in this state is not
barred by the law of limitations until the person has lived in this
state for 12 months. This subsection does not affect the
application of Subsections (a) and (b).

http://tlo2.tlc.state.tx.us/statutes....htm#16.067.00

-------------------------------------------------------------------------------

Check CO limitations. If there is no specific limitation for medical debt, it would most likely fall under 4 year Uniform Commercial Code. But, I don't think it would matter as you have been in TX more than 4 years. You may want to check with a local attorney to be sure, but I don't see how they could sue you successfully for this.

[Westernacc]

Thanks Palerider, I was reading the link to TCP, Its funny how you can read somthing, then read it agian and its like, duh! I guess they make more sense when you have a specific problem.

I have never been threatened by a law suit, basically no Dunns. Of course when I take a "shot" at them I may wake them up.

Monday I will check to see if they are bonded in TX, Co requires Bond and permit so to speak.
Question: If they are ok to operate in CO, but not bonded in TX can they still report a TL since I feek that is "an attempt to collect"?? or did I miss the boat completely?

Thanks

[Pale Rider]

They must be bonded in Texas to engage in debt collection. A TL on a credit report is a form of debt collection per FTC and the courts.

[Westernacc]

Thanks agian, I curtianly appreciate your patience. and I am encouraged that you guys will help, its empowering. (cant wait till Monday )

[spinn]

As an aside....if you make more money than your wife only your credit will be considered and they look at the middle score which in your case is 641. Since mortages are secured, I believe prime rates start at 680 so you are very close.

Have you considered being added as an authorized user onto a parents account? If they have an old and in good standing credit card, that may raise your score into prime territory.

I also think your loan officer is wrong....a 641 score is very doable, the rate may just be a bit higher. Not sure if the same rules apply for construction loans however.

This wont fix your credit but it may get you the loan. You could also pay down any balances you may have on current cards, utilization is a big factor.

[Westernacc]

we dont have CC, learned from the Cap1 and providian deal. The broker put in for 7.2%. I am an AU on business accnt and Moms home depot acct those are flawless, .personelly I dont like cc enteries but theses dont hurt .

The broker submitted it to lender got response back "level 1" i think, he said it was refused because of "unpaid" TL's and he would submit it agian as "all paid", that was Friday. You are right I can buy an existing home, so they have said..lol
but since I have so much equity in the 15 acreas, I was going to use for down payment since the bank is willing to release 3 acreas for the home.
My thinking is if I pay these UN verified acct. out of sol and possibly restart sol and and re- age the accts.as stated above "would tank" my scores

This loan was for 1 time close const- perm
I tried my bank for just a constuction loan with mortgage commitment for $180,000 in hand. They said they have not delt with this lender and felt uncomfortable ???this lender has done 2 previous const. loans for my Brother. they also stated that they were conserned about debt to income ratio. this all stricks me as weird now that I think about it, if they have a commitment letter why would they care what happens after const.?? any mortgage co issuing a comm. ltr would have an "out" if the credit info changed during the const. period

[Hedwig]

One of your problems may be that you don't have credit cards. Lenders like to see on-time payments on revolving debt. That doesn't mean you even have to pay interest. You can charge a few things that you have the cash for, set the cash aside and pay the bill in full when it comes. But the revolving card history is very important. The cards probably show that you are an AU, so you really don't have a history of your own. That makes unpaid med accounts more important to the lender.

If you had the old unpaid accounts but several credit cards you had paid on time every month for several years, you'd be showing the lender a much better history, even with the same score.

As far as Spinn's comment that only your history is considered if you make more, that's not entirely true. If you make enough to qualify for the mortgage with just your income, then they can write the loan in your name only and consider only your credit. If, however, you need your wife's salary included to have enough income, then the loan will be in both names and both credit histories are considered.

That's what I had to do. At one point I needed my husband's income. The last time we refinanced, some bogus collections showed up on his report. I wanted to get the rate available at the moment. Since I now have enough income to qualify on my own, I got the mortgage solely in my name and his credit was not considered at all. But if I didn't have enough income, they would have to consider his.

[spinn]

Quote:

Originally Posted by Hedwig As far as Spinn's comment that only your history is considered if you make more, that's not entirely true. If you make enough to qualify for the mortgage with just your income, then they can write the loan in your name only and consider only your credit. If, however, you need your wife's salary included to have enough income, then the loan will be in both names and both credit histories are considered.

While I realize all scenarios are different I was a loan officer for about a year and with both companies I worked for you can consider both incomes to determine the ability to pay, but only the higher earners middle credit score was considered.

You have to remember that loan officers get paid more the higher your rate is. I cant tell you how many fraudulent HUD 1 forms I saw where a loan officer would double enter things to essentially get paid twice. Loan officers often make $5000 or more per loan and the higher the rate.....the more they make.

[Westernacc]

wow Spin that is scary!..Thanks for yours and Hedwigs comments.

I have alot of excellent loans some payed off some I still am paying never late.
I have 4 GMAC auto. 2 paid off never late. owe 1 payment on 1 and a "bunch" on one..lol..never late pays as agrees. I have 1 w/ agricredit. pays as agrees never late ans several banks loans mostly paid off as agreed others still paying.
One problem I did find though is my child support order show 30 days late for almost a year but that is not true, I have all payment receipts I will have to address that Monday, shouldnt be to hard to clear up.

We just dont have CC's, I have an anal retentave thing about paying that interest borrow my own money. Do you guys think that getting one would help enough to offset that as far as credit strenght??? I dont really need one but if It makes that big of a differance than it's worth considering.

[Hedwig]

Yes, getting a credit card will help. And you don't have to pay interest on it. That's what I was saying. Have the money available and pay it in full when you get the bill. There shouldn't be any interest, unless it's a subprime card that charges interest from the day of purchase.

Before you apply, you want to see if they have a grace period, which means if you pay within the (usually) 25-30 days after the statement closes, you won't pay interest. Most major cards are like this. You pay in full, there's no interest. The balance as of the statement closing date is what is reported, so you will show a record of having the balances and paying them.

Revolving credit is a big part of the score, and utilization is also a big part. Utilization is computed using revolving credit.

[jlynn]

Quote:

Originally Posted by Hedwig As far as Spinn's comment that only your history is considered if you make more, that's not entirely true. If you make enough to qualify for the mortgage with just your income, then they can write the loan in your name only and consider only your credit. If, however, you need your wife's salary included to have enough income, then the loan will be in both names and both credit histories are considered.

To further that, remember, TX is a community property state. They will pull a spouses credit to make sure there are no judgments and or tax liens which could have an effect on the property.

[Westernacc]

Ok makes sense, couple more questions on CC, Will they raise the rate and use the excuse of pre-exsisting defaults from 2002? and Do you have any recommendations of what card you guys have heard positive remarks on?? boy that last one is a loaded Q....lol
Thanks

[Pale Rider]

Quote:

Originally Posted by Westernacc basicaly what hes saying is put that debt on the mortgage and finance it for 15 -30 yrs

Another thought after re-reading this. I could be wrong, but every single broker/lender I have spoken with have told me that it is impossible to walk away from closing with cash or to do this type of financing. The only way I could see to put the money into the mortgage would be to get a second to cover the amount. The problem with that is Texas only allows equity loans to be for 80% of the available equity in the home. I just don't see how you could finance the old debts on new construction. I tried some of the "creative financing" ideas from the infomercials and was told all that was impossible in Texas. All the Ditech type lenders hang up on me as soon as I mention Texas.

[Hedwig]

I don't know that you can do it for construction or when you're buying, but you can definitely get cash out on a refi. I've done it several times.

[Hedwig]

Quote:

Originally Posted by Westernacc Ok makes sense, couple more questions on CC, Will they raise the rate and use the excuse of pre-exsisting defaults from 2002? and Do you have any recommendations of what card you guys have heard positive remarks on?? boy that last one is a loaded Q....lol Thanks

They probably won't raise the rate after you get the card unless you have some problems then. But if you're paying it off every month it doesn't matter if the interest rate is 50%--you're not paying interest if you pay the bill every month in full. That's the point. Interest rate doesn't matter. Let them raise it to whatever they want as long as you're only using it for what you can pay for at the end of the month.

To be honest with you, I don't even know what the rate is on most of the cards I have. I only care on ones that I want to use for a cash-advance or for intro rates to buy something big. Then I have to watch to pay it off before the rate changes. Otherwise I could care less.

That said, both Citi and Chase have some good cards, I have several accounts with each and have had no problems. You may get a lower-tier card to start since you have no revolving history, though.

[Westernacc]

Thanks for the thoughts, I guess I will have to wait till monday and have the broker clarify my options.

Point taken on the CC, so programmed about % grrrrrrrr
The comment made by the broker, "we can settle pennies on the dollar" is kind of "open ended" I know the Providian card I had in 2001 was limit of $1000, now asset mngmnt has it on for over 2300 bucks! and thdat thay have as reported is 2004?

[FixinThings]

Throughout this discussion, there has been a studied reluctance to explore what options the OP might have in achieving his goal.

As stated, he is interested in obtaining a single-closing construction loan/mortgage in the near future. I appears that he has the resources to cover the potential obligation and is running afoul of the confulence of his goal on the one hand and the credit profile, TX restrictions, and credit/banking/underwriting guidelines on the other.

While his goal is technically an achievable objective, the circumstances make it seem that he is trying to pound a square peg into a round hole. Something has to give to accomplish what he wants to get done.

I would suggest that the OP look at the overall costs of obtaining the single-closing loan versus a more traditional two-closing construction loan/mortgage from the vantage point of two, three, even five years in the future.

Short-term cost for long-term gain isn't necessarily something to be rejected. Nor is the thought that "now" is not the right time. There is also the thought of paying today's obligations with tomorrow's dollars. All need to be considered.

Solving the credit report issues and CC track record can be addressed simultaneously with a two-closing strategy, and may have the effect of lowering the effective interest rate on the eventual mortgage. The result is lower cost over time.

By looking at the TOTAL cost picture of each option, OP can have a better idea as to what the choices are and can make an informed decision as to how to proceed...including how to deal with the issues raised by his credit history.