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Shane's Info Packed Mortgage Blog

Mortgage Information Out the Wazoo!

By Shane Milne | Mortgage Broker
or Lender in Laguna Niguel, CA

The Best Way to Remove Account In Dispute Comments

If you are applying for a mortgage and your credit report contains accounts that are being disputed, that can cause problems with your mortgage application.  The reason being is supposedly when an account is in dispute it no longer has an impact on your credit score, and since mortgage lenders want to have as accurate as possible credit profile for their applicants they don't want any disputed accounts skewing that credit score.

If you are applying for a Fannie Mae loan program, your loan is run through an automated underwriting system (AUS) which is a computer program that analyzes the information from the loan application & your credit report.  Fannie Mae's calls their AUS Desktop Underwriter, or "DU" for short.  So when running your application & credit through DU, and an account is in dispute, within the DU report (called "findings") there will be a note that says:

DU identified the following tradeline(s) as disputed by the borrower and did not include the tradeline (s) in the credit risk assessment. The lender must verify the accuracy of the tradeline(s) by determining if it belongs to the borrower and by confirming the accuracy of the payment history. If the tradeline does not belong to the borrower, or the reported payment history is inaccurate, no further action is necessary. If the tradeline does belong to the borrower and the reported payment history is accurate, it must be taken into consideration in the credit risk assessment. To ensure it is considered, the lender may obtain a new credit report with the tradeline no longer reported as disputed and resubmit the loan casefile to DU, or the lender may manually underwrite the loan.

Very few lenders are willing to manually underwrite Fannie Mae loans, so if that note comes up on your DU findings, it'll then list the accounts which have been flagged as "in dispute", and you'll need to remove the dispute comments in order for the DU findings to be valid.

If you are applying for a Freddie Mac loan program, a dispute comment will cause an error in their AUS system (called LoanProspector, or "LP" for short) and it won't be able to process your application.  There isn't any note in their findings, it'll just come back with an "Incomplete" status (with a code 21).

If you are applying for an FHA mortgage, then only certain disputed accounts need to have the dispute comments removed (otherwise the loan must be manually underwritten, which a lot of lenders do, but you are then subjected to tigher qualifying guidelines).  FHA's AUS (called FHA TOTAL) won't have any special notes for disputed accounts, so the underwriter must manually apply FHA's guidelines regarding disputed accounts.  FHA states:

If the cumulative outstanding balance of disputed "derogatory credit accounts" of all borrowers is equal to or greater than $1,000, the mortgage application must be downgraded to a “Refer” and an underwriter is required to manually underwrite the loan.  If the cumulative outstanding balance of disputed derogatory credit accounts of all borrowers is less than $1,000, a downgrade is not required.  Certain accounts are excluded, such as disputed medical accounts & disputed derogatory credit accounts resulting from identity theft, credit card theft, or unauthorized use (however in the latter a letter is needed from from the creditor, or other appropriate documentation to support the dispute, such as a police report disputing the fraudulent charges).

"Derogatory credit accounts" are defined as disputed charge-off accounts, disputed collection accounts, and disputed accounts with late payments in the last 24 months.  Disputed derogatory credit accounts of a non-purchasing spouse in a community property state are not included in the cumulative balance for determining if the mortgage application is downgraded to a “Refer”.  "Non-derogatory disputed accounts" are excluded from the $1,000 cumulative total.  "Non-derogatory disputed accounts" include disputed accounts with zero balance, disputed accounts with late payments aged 24 months or greater, and disputed accounts that are current and paid as agreed.

USDA financing's guidelines are:

When an applicant’s credit report indicates a tradeline or public record is in dispute, a GUS underwriting recommendation of “Accept” may need to be downgraded by the lender to a “Refer.” A downgrade is not required if any of the following conditions are met in regards to the disputed item listed on the credit report::
  1. The disputed account has a zero balance
  2. The disputed account is marked as "paid in full", or "resolved"
  3. The disputed account is both
    1. less than $500, and
    2. more than 24 months old, based on the date of dispute
It's pretty obvious if an account has a zero balance (#1) or is marked "paid in full" or "resolved" (#2), as all of that is listed on the credit report.  However what isn't so obvious is if the account is less than $500 and the dispute is more than 24 months old (#3), because credit reports rarely ever say when the dispute happened.  So a general rule of thumb is if it isn't a $0 balance or doesn't say "paid in full" or "resolved" then it's generally advisable to remove the dispute comments., however they take it one step further and require that any account in dispute have a evidence showing a justifiable reason for doing so - such as correspondence from you or your attorney to the creditor.

VA financing states "Disputed Accounts: Lenders may consider a veteran's claim of bona fide or legal defenses regarding unpaid debts except when the debt has been reduced to judgment. Account balances reduced to judgment by a court must either be paid in full or subject to a repayment plan with a history of timely payments. For unpaid debts or debts that have not been paid timely, pay-off of these debts after the acceptability of applicant's credit is questioned does not alter the unsatisfactory record of payment" - which isn't very specific at all.  In general, VA underwriters have been OK with disputed accounts, but if credit is borderline between qualifying & not qualifying, you may be asked to remove accounts from being in dispute so they can have a more accurate underwriting picture.  There are some lenders may add "overlay" guidelines regarding disputed accounts, to be sure to ask ahead of time.



...The Info You Clicked On This Blog Post For...

I always have my clients deal directly with the credit bureaus when removing dispute remarks.  We've had a 100% success rate and is the quickest way to go about it.

Experian
475 Anton Blvd.
Costa Mesa, CA 92626
714-830-7000 is answered by a live human being, tell them you need the Executive Customer Service Team to end the dispute(s), hours are 8AM-5PM Pacific Time

Equifax
1550 Peachtree St, NW
Atlanta, GA 30309
404-885-8300 is answered by a live human being, tell them you need to speak with someone in the Executive Consumer Service department.

TransUnion
555 W Adams St
Chicago, IL 60661
312-985-2000 it has a machine greeting but just stay on the line and you are transferred to a live person, tell them you need to speak with someone in the Special Handling Department, you'll have to wait a little bit as they need to connect to customer service then get it elevated to the Special Handling Department (it is hit or miss, TransUnion often proves to be the most challenging)

If you cannot get the Special Handling Department, then when contacting the normal customer service reps you should say:

I need to dispute the compliance condition remarks code of "AID" (Account In Dispute) because I am no longer disputing the account.

The customer service rep should be able to immediately end the dispute, as in during the phone call.

There are some situations that disputes cannot be ended by the consumer, and must be ended by the creditor, such as if there are multiple disputes on the same trade line. Remember to always be patient with the customer service reps, as they are trying to help you but may have limited communication skills depending on where the customer service call center is based.  If there are confusing terms being used, don't be afraid to admit you do not understand what they are saying and ask for them to re-explain or to transfer you to someone in the U.S.

Shane Milne | Loan Officer in Orange County, CA | NMLS #81195
TheBestHomeLoans.com | About Shane & Client Testimonials
Direct local #'s: 949-273-4161 or 646-257-4842

Comments

By Trevor Curran,  Fri Apr 5 2013, 04:54
Shane,

As always, your information is superb, detailed, and timely! Awesome blog article, thank you for sharing!

Trevor Curran
NMLS #40140
By Christina Solorzano,  Sat Apr 6 2013, 05:52
Great article.
By Alex Standt,  Wed Apr 10 2013, 07:57
This article was awesome!! Thank you. Being fairly new to the credit repair and credit score arena I am constantly trying to gather as much information as possible to try and keep myself headed in the right general direction. Spending some time on this post has actually given me a lot of great points to think about. In my recent research I have also been able to find some useful information related to this topic when I Googled the credit locker university. Thanks again!
By Jim Walsh,  Thu Apr 11 2013, 13:55
Dealing with this issue right now-Thought my house was sold then 48 hours before close was told my buyer had a ZERO balance but two dispute Tradelines and it got kicked out of the system. Their Mortgage company is working with a third party to get these off but it appears everyone is very backed up as it's 7 business days today and still only one bureau has both tradelines removed. What a mess!
By Shane Milne,  Thu Apr 11 2013, 14:06
Sorry to hear Jim. I'd recommend you forward this article to your buyer so they can get the dispute removed themselves, hope it works out for you!
By Alex Standt,  Mon Apr 15 2013, 07:39
Here is the link to the University I was talking about, they have a bunch of information on credit. http://mycreditlocker.com/blog/7-Credit-Locker-University
By m323,  Wed Nov 27 2013, 12:35
The department you want at Experian is the National Consumer Assistance Center
By Shane Milne,  Wed Nov 27 2013, 13:11
Thanks m323, since initially posting this some of the department names have changed. Also, I have found some of them are now require you obtain your official credit report first at https://www.annualcreditreport.com/index.action (really depends on who you speak with).
By jake.renner,  Mon Dec 30 2013, 08:12
I had made mention in a previous comment that disputing the errors on my credit report, on my own, was really pretty easy once it was laid out in front of me. This was especially the case when I did my TransUnion Dispute. Here is some information that really helped me along http://blog.mycreditlocker.com/transunion-dispute-for-errors-on-your-credit-report/
By Lisa Marrie,  Mon Jan 6 2014, 17:24
I was told by all three bureaus that they can remove the statements (which they have for me in the past) but the creditor is adding them back when they report monthly. They said that I would need to get the creditor to stop reporting it for them to be permanently removed. I really need help with this any information would be appreciated.
By Shane Milne,  Mon Jan 6 2014, 19:12
Lisa, creditors are free to report whatever they want, but you can ask the creditors to not dispute the accounts in the future. It may take some persistence and speaking to someone "at the top", but I have faith it can be done. I don't offer any credit repair services, but I'd be willing to help you figure out what needs to happen & why the creditors keep on reporting them in dispute.
By Tracey Haymes,  Fri Apr 25 2014, 09:00
The number for Experian was not answered by a live person but rather by the 'automated gal'. Pressed '0' for the next available operator, was on hold for 7 minutes, and once a live person was on the line I asked for the National Consumer Assistance Center. FYI: The customer service rep refused to transfer me to that department because I did not have an actual credit report from Experian which includes a 10-digit report number (I have my 3 bureau report from Privacy Guard), so make sure you have that. I went to Experian's website and once I obtained my report number I called 800 493 1058 and within 5 minutes it was taken care of and the rep I spoke with stated I would receive an email from Experian advising me the dispute remark was removed. Next I contacted TransUnion at the number provided by you and told the operator I needed the dispute remark removed, she immediately transferred me to the Special Handling Dept. where the phone was answered immediately and after giving the rep my social and verifying my name and address he stated the remark would be removed in 10 minutes. Thanks for the awesome info as well as the contact information, much appreciated!
By Shane Milne,  Fri Apr 25 2014, 09:15
Hi Tracey, I have had some recent reports of what you experience. The best solution is to go to https://www.annualcreditreport.com and get your official Experian credit report, which will list the 10-digit report number you were asked for.
By Matt Steele,  Sat Apr 26 2014, 15:43
I can't seem to get a report number from Experian for the life of me. I have tried to order my report 4 times today, and that's because the report I ordered to be mailed to me still hasn't arrived 2 months later. The first was from the website which you recommend but it came back with an error that said it cannot be completed at this time. This is the same error message I got when I tried to order my report via robot on the phone to mail to me. The other three were from experian.com, experiandirect.com, and creditexpert.com (a website owned by experian) and not a single one of these reports have a report number on them. Calling in to any of those numbers is fruitless because you can't get past the robot without a report number. The other two bureaus were extremely simple, but I have been at it for 5 hours today on this one and can't seem to figure it out. Do you have any ideas for me?
By Shane Milne,  Sat Apr 26 2014, 22:08
Matt, Experian report numbers are in a XXXX-XXXX-XX number format, in case that helps. I'm looking at an Experian report of my own from that website, and there are a couple numbers on there. I'd try calling 800-509-8495 or 800-493-1058.
By Matt Steele,  Sun Apr 27 2014, 12:28
Thanks for the reply Shane. I have another two numbers to add to your list for Experian. 888-210-9101 and 866-673-0140 were both numbers that got me through to customer service this morning and they were able to forward me to the "NCAC" who looked me up by SSN and was able to remove the disputes in about 10 minutes. She said the update takes 24-72 hours and the system sends an automated email when it happens. Warning, it took a little over 30 minutes of hold time to get connected but once I was it was super fast.

Thanks again!

PS - verified that there were no numbers on my particular bureau from that website but forgot to ask the lady why. I was just too happy wiht getting through to think about it!
By Shane Milne,  Sun Apr 27 2014, 12:43
You are welcome. Glad you were able to get through, good luck on closing on your mortgage.
By Pete Schnur,  Thu May 15 2014, 11:14
Shane, THANK YOU for posting this information. I spent about an hour or so on the phone this morning calling all three numbers, and it worked as advertised. I've looked over the web for this information in a clear, concise manner and could not find it -- until I visited this page. Thanks again, the info made my task this morning a lot easier than it would have otherwise been.
By Steve Garrett,  Thu May 22 2014, 09:06
good article
By radioadvertising@outlook.com,  Tue May 27 2014, 14:18
I called experian # and they told me I needed a 10 digit report number. I informed them I didn't not have one that I was in the middle of a refinance for home loan and my loan officer asked me to call because of dispute comments. They put me right thru.
Both experian and equifax have said they removed dispute comments but when loan officer pulled my report they are still showing. How long does it take for my credit report to reflect the change?
By Shane Milne,  Tue May 27 2014, 14:22
They should be removed as soon as the credit reporting agencies (CRA's) say they are removed. You may want to contact the CRA's and confirmed they removed the dispute comments. Usually I wait 1 business day to check credit after the CRA's have said the comments have been removed.
By Joseph Young,  Tue Jun 3 2014, 11:03
I'm trying to get removal from equifax of "Consumer disputes account" listed on my report... they are saying it can take up to 30 days for this to happen.. We were supposed to close on our house within the next week!!! Any advice?. I 've called the creditor to try to have them remove or reply to the dispute as well, so that equifax can expedite. Haven't gotten that far yet with the Creditor. The account is closed paid in full, and at 0 balance, and has been since 2010!!! AHHHHH!! Any help is appreciated
By Shane Milne,  Fri Jun 20 2014, 12:04
People have been reporting that with Equifax it's been taking 72 hours. So you may want to try calling back and getting a different customer service representative. Some people have reported they've spoken to a "Ms. Crestwell" at Equifax who helped them.
By Trmurphy12,  Mon Jul 7 2014, 14:34
Will removing disputes lower your credit score?
By Shane Milne,  Mon Jul 7 2014, 15:11
It depends on the details of the account. Supposedly disputed accounts are not factored into the credit scores, so taking the account out of dispute will factor it into the credit score. If it's a delinquent account, then it would most likely negatively impact your credit scores.
By Joshua.corney,  Mon Jul 7 2014, 21:33
II am taking out a mortgage and I recently filed a dispute to remove a zero balance credit card that I was only a authorized user. the dispute has been resolved and the accountis removed from my credit report completely. The lender initially saw this on my account with a zero balance and me as only a authorized user but never said anything about not making a dispute. I filed a dispute to update my credit report but not knowing what I just did. Will this end up being a problem for me as I close in 7 days? I have pulled my credit report several times and I do not see anything on my report nor on this account as it has been deleted to indicate a dispute. I can however go to check status of disputes and see the outcome of the dispute but that is it. Can lenders see filed disputes that have been resolved? thanks great article!
By Shane Milne,  Mon Jul 7 2014, 21:52
If it's already deleted from your credit then you shouldn't have to worry about it, since the dispute comments will have also been deleted.
By srdaphnie,  Tue Jul 8 2014, 14:04
By:Sasha R.

Your blog and post have helped me tremendously thank you Shane your the best!
By Shane Milne,  Wed Jul 30 2014, 18:57
You are welcome, glad it has helped.
By stu200801,  Sat Aug 9 2014, 07:35
Trying to purchase a home but disputes were holding it up. I have only contacted Experian so far. Have to wait to contact the others two Monday. I received my email that the disputes were removed. Yet now in their place is "This item was updated from our processing of your dispute in Aug 2014". Is this fine or am I just getting a run around here?
By Shane Milne,  Sat Aug 9 2014, 10:07
stu, that should mean the dispute comments have been removed. What you see on your consumer reports is different than the comments that will appear on the lender run credit report. I've removed disputes from my own report and the comments you received are exactly what I saw too.
By triverafamila31,  Wed Aug 27 2014, 09:14
Shane, I am taking out a mortgage and had no clue disputes affected my report. i submitted the dispute with Transunion as paid in full. It was a medical bill. I think I will contact transunion and have them cancel the dispute. Secondly since I paid the debt and have a copy of the delete credit line letter that the collection agency sends to the credit agencies any advice on how to get that letter to the agencies my self to speed up the process of removing the account? Thanks in advance of your assistance
By Shane Milne,  Wed Aug 27 2014, 09:21
You can try faxing the letter to the credit bureaus, but usually either your loan officer will need to a rapid rescore or the trade line will just need to be updated in the standard amount of time (30 days).
By triverafamila31,  Wed Aug 27 2014, 09:59
Thanks for the quick response. I spoke with Transunion and followed the steps listed above. The rep requested I fax the doc and they would remove it in 5 business days or less as long as the request is in good order.
By Shane Milne,  Wed Aug 27 2014, 10:01
That is awesome, glad they are accommodating. Good luck with the rest of the process!
By triverafamila31,  Wed Aug 27 2014, 10:04
Thanks Shane!

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