Kentucky VA Home Loan Approval Requirements with Collections on Credit Report

Collection accounts are account for a debt that have been submitted to a collection agency by the creditor generally due to nonpayment. Below are general tips and guidance on what DU will require when collection accounts are reporting on a borrower’s credit report. Accounts that are reported as past due but not yet turned over to a collection agency must be brought current. These past due accounts are not considered collection accounts. Kentucky Mortgage Requirements for Collections and VA Home Loan Approval Any collection account required by DU to be paid must be paid prior to or at closing. Isolated collection account does not necessarily have to be paid off for the loan approval. Borrowers with a history of collection accounts should have reestablished satisfactory credit in order to be considered a satisfactory credit risk. Lenders/underwriters should review the complete credit history and use sound judgment to determine if the collection account poses a credit risk to the borrower’s ability to repay the loan. If the collection account is listed on the credit report with a minimum payment, then the debt should be recognized at the minimum payment amount Joel Lobb (NMLS#57916) Senior Loan Officer American Mortgage Solutions, Inc. 10602 Timberwood Circle Suite 3 Louisville, KY 40223 Company ID #1364 | MB73346 Text/call 502-905-3708 kentuckyloan@gmail.com If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708. Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/

Kentucky VA loan with outstanding collections and charge offs listed on the credit report?

Collections & Charge Offs are two different things.  Below is what VA saying about them:

 

Collection Accounts

Isolated collection accounts do not necessarily have to be paid off as a condition for loan approval. A credit report may show numerous satisfactory accounts and one or two unpaid medical (or other) collections. In such instances, while it would be preferable to have collections paid, it would not necessarily be a requirement for loan approval.

However, collection accounts must be considered part of the borrower's overall credit history and unpaid collection accounts should be considered open, recent credit.

Borrowers with a history of collection accounts should have re-established satisfactory credit in order to be considered a satisfactory credit risk.

While VA does not require that collection accounts be paid-off prior to closing if the borrower's overall credit is acceptable, an underwriter must address the existence of the collection account(s) with an explanation on VA Form 26-6393, Loan Analysis, for excluding the negative credit history they represent.

If the collection account is listed on the credit report with a minimum payment, then the debt should be recognized at the minimum payment amount.

Charged off Accounts

These accounts are typically collections in which the creditor is no longer pursuing collection of the account. The underwriter must address the circumstances regarding the negative credit history when reviewing the overall credit of the borrower(s).

 

 
2 different topics best if you can send me credit to review. 

 

·         Charged off accounts generally ignored

·         Collection accounts on Federal debt are a big issue so we careful there

·         Collections not required to be paid off unless they are extremely high

·         Manual Underwrite we do require an LOE from Veteran for collections

·         What happened, what they did to resolve, what are they doing in the future to either resolve or to prevent this from happening and finally if they are going to enter into a payment plan or not.  Ultimately on the resolution of the collection the UW does not care but VA requires that as part of LOE.

 

Hope this helps send me credit for full evaluation.

 

The VA underwriter will want to verify the Kentucky Mortgage Veteran has the ability to pay these items or will want to know how they were paid off before closing.

Any collection or charge off showing as a judgement or lien on the VA mortgage applicant's credit report, must be paid before closing. These affect the title and must be paid before the mortgage is recorded

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Bankruptcy Guidelines for Kentucky Conventional & ...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Bankruptcy Guidelines for Kentucky Conventional & ...: Bankruptcy Guidelines for Kentucky Conventional  Kentucky FHA Mortgage Loans  Bankruptcy Chapter 7 ...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Disputes on Credit Report and Kentucky Mortgage Lo...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Disputes on Credit Report and Kentucky Mortgage Lo...: Applying for a Mortgage Soon? Don't Dispute that Account Applying for a Kentucky Mortgage Soon? Don't Dispute that Account       Sou...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: What credit score do mortgage lenders use?

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: What credit score do mortgage lenders use?: Which FICO Score Generation Do Mortgage Lenders Use? The best-known credit scores are going to fall under either the  FICO or VantageScore ...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: How to Raise Your Credit Score Fast for Kentucky M...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: How to Raise Your Credit Score Fast for Kentucky M...: How to Raise Your Credit Score Fast for Kentucky Mortgage Loan Approval for FHA, VA, USDA and KHC Mortgage loans.  Fico Score Tips to raise ...