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Pre-approval sent to underwriting. Can we get approved?

Our pre- approval application was sent to underwriting because 2 collection accts came up on my husband's report as "in dispute." We paid the accts and they are shown as paid, but it also says the acct is in dispute. What are our chances for being approved for an FHA loan? My husband's score is 608, great debt to income ratio, great employment hisotry, great income. Thanks!
  • September 26 2011 - Chattanooga
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Answers (4)

Contact the collection company and let them know that you no longer dispute the item, then contact the bureaus to remove the "account in dispute" information.  The bureaus will then contact the collection company to verify and then remove.  It's a simple process.
  • October 01 2011
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What I have found is if there are accounts in dispute the credit depositories will issue a 900 credit score which has no value. I suggest talking with you lender if it would be to your advantage to remove your disputes. and get a credit rescore.

Happy funding, Rudi
  • September 26 2011
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Thank you for your insight! We were kind of in the dark in terms of what underwriters look for. Hopefully it will work out for us!
  • September 26 2011
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If the collections are paid off and 608 meets the lenders FICO score requirements, I would say the chances are pretty good.   When credit scores are low, the underwriter will consider why they are low to see if you are a bad credit risk.   A paid off collection will look more favorable than 30 day late payments.

The underwriter will also look for other conpensating factors. In your case, low debt to income ratio, employment history, and great income.

If you have enough good compensating factors, most underwriters are willing to overlook a minor bad thing for FHA loans.

Good luck!!!
  • September 26 2011
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