Home Buying in Margate>Question Details

Capragal, Home Buyer in Coconut Creek, FL

FHA - charge off account

Asked by Capragal, Coconut Creek, FL Mon Jun 18, 2012

I was preapproved by my lender (he also ran my credit report) and I finally found a home. I was told that I have to also be preapproved by the sellers lender. The sellers lender is concerned because I have a charge off. This charge off is due to a divorce. I was divorced in 2007 and the charge off was a auto lease. I tried paying it for as long as I could (705 a month), but I was not getting any child support and I had to pay rent and could not afford it. I gave the vehicle to my son who continued to pay until he lost this job. It is showing June 2010 as a charge off.This lender just ran my credit and I am at 707 score. My lender never said it would be a concern. I have minimal debt to ratio.

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6
congratulations! you are doing all the right things. Wish you all the best with everything!
0 votes Thank Flag Link Mon Jun 18, 2012
I'm not too concerned about the appraisel. A home 2 blocks away sold for the same price and it was a smaller home on a smaller lot.
0 votes Thank Flag Link Mon Jun 18, 2012
I'm not too concerned about the appraisel. A home 2 blocks away sold for the same price and it was a smaller home on a smaller lot.
0 votes Thank Flag Link Mon Jun 18, 2012
Good news. The lender sent an email to me, my agent and sellers agent to execute the contract. While I was waiting, I looked up FHA 2012 guidelines. It says any collections [not charge offs] prior to 2 years or 1000 and under do not have to be paid. Even if they consider a charge off as a collection it is 2 years so it shouldn't matter.
0 votes Thank Flag Link Mon Jun 18, 2012
there is a great article posted in the miami herald this weekend........and i quote"Low-end appraisals

A big problem for those financing purchases: Appraisals are coming in below the agreed-upon prices. That’s because they rely on historical data and trail the market.

The lower appraisals mean buyers have to ante up larger down payments, because banks won’t lend as much.

“Many houses are selling above the appraisals. Many buyers are learning that if they balk, they lose the house because others are willing to make up the difference out of their own pockets,” said Mauricio Bara, a Coldwell Banker broker and member of the Master Brokers Forum, who sells heavily in Coral Gables and its surrounding areas.

Read more here: http://www.miamiherald.com/2012/06/16/2853177_p2/return-of-t…
0 votes Thank Flag Link Mon Jun 18, 2012
Usually if your lender is a reputable well known "lender" or Bank, this would not be so necessary. but so many prequalifications come out and this could have possibly become an issue with them later on in the transaction after you have put in expenses like inspections, appraisals and etc. Take a good look at the standing of your lender and go over this issue with them and try to work for a "committment" letter. A committment is WAY stronger than a Prequalification or PreApproval.. Another potential issue is going to be your appraisal........
0 votes Thank Flag Link Mon Jun 18, 2012
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