Short Sale reporting errors in DU Underwriting software??Anyone know about this? Help?

My buyers had to do a short sale a little over 2 years ago due to job loss.  Since then they have scrimped and saved and we were assured by our lender that 2 yrs after the short sale we were okay to do a conventional loan with 20% down. Credit was run and it showed a short sale.  So per the lender we were good to start shopping. Wrote an offer on a short sale, got it  accepted and then the lender ran the buyers through DU Underwriting.  According to the lender, there is a glitch in the DU Underwriting software.

Du shows my buyer had a foreclosure.  Being told it is happening to other people but neither my lender (Imortage) nor bank reporting (Wells Fargo) nor my inhouse lender know how to "fix" it. 

Buyer could lose his new house that he and his wife have worked so hard to get.  Anyone run into this?

Know of any fixes out there? Or is this a class action lawsuit waiting to happen?    

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Permalink Reply by Diane Block on January 30, 2013 at 3:38am
Hi, my name is Diane and we have been dealing with the exact problem & trying to get it resolved since August! We hired a credit repair company to dispute this but as of yet have not gotten it removed. I spent 2 hours on the phone with Experian and spoke to a manager who contacted Chase, verified the CO listed was settled in a short sale, he updated my report to reflect CL-closed & CO-charge off still there for the month of nov 2009. Comments state-"settled for less than full balance" we ran it through AUS Friday and came back with "Refer wi Caution" and listed Chase as foreclosure!!! I don't know what else I can do at this point. Our short sale was completed in 8/2010! Our credit is 720 with this flaw because it took 18 months to get the Shortsale done because of Chase!
How can FannieMae get away with is??
Can you help me and tell me what you did to fix it? [email protected]
Thank you!
Permalink Reply by Rolando Matta on January 17, 2013 at 6:20am

Kristen, did you get this issue solved? If so, how?  I will appreciate any feedback.  I am exactly in the same situation.

the DU shows foreclosure, Experian sais 9 is the right code.

Thanks.

[email protected]

702-358-1318

 

 

Permalink Reply by Sara Wildey on January 17, 2013 at 8:17am
Hello,

Im having this exact problem as well it seems in getting a DU approval upfront, Experian reports as a "9", if they wont change it than what else can be done?

Ive had other loans successfully approved through DU so not sure why this one loan would be any different.

Any ideas or solutions would be greatly appreciated.
Permalink Reply by Joseph Alfe on January 24, 2013 at 2:13pm

Ok, first things first things first:  Did you, at any time, receive a Notice of Default (NOD) or Lis Pendans?  This is when the lender files a default and starts the foreclosure process. Run your credit.  If either of these things happen, it's game over, regardless of whether or not you actually lost the home through a foreclosure.  All creditors will count an NOD or Lis Pendans as a foreclosure, regardless of if you had one or not.

It's probably not the short sale itself, but one of these, but you never know.

www.josephalfe.com

Permalink Reply by Sara Wildey on January 25, 2013 at 4:56am

I got my issue fixed, I opened a credit rescore order wiht our credit services, they had Experian call Bank of America over the phone and Experian just asked BofA if there was a foreclosure, they said "No" and Experian said "Thank you" and within 24 hours I was able to update my credit report and went through DU no problem.

 

 

Permalink Reply by Joseph Alfe on January 25, 2013 at 5:01am

I am happy to hear that!

Permalink Reply by yadira delacruz on January 25, 2013 at 12:24pm

Hello Sara.. 

I am presently having the same issue. After reading your posting I called Experian and they gave me the old run around... When you refer to ordering a rapid rescore from your "credit services" ? How do I go about ordering one? or can you recommend the "credit service" you used to obtain your rapid credit rescore? Pls. post or you can shoot me an e-mail at [email protected] any info and greatly appreciated! 

Permalink Reply by yadira delacruz on January 30, 2013 at 5:34am

Diane, I rec'd your question.. What a nightmare.. You'd think that congress would take measures to address this problem because this has affected a large group of people and Experian and Chase have done nothing to fix this. I will tell you where I'm at in my process, a week ago I spoke to a Mortgage broker and he told me that there was a couple of things he could do to help my situation. "One option would take a couple of day and if that didn't work then he said it would take about 45 day" but didn't tell me how or any details about the options? After 3 days he told me that he was able to get me approved in the Fannie Mae DU system? I was like great! but since then I have left him 2 messages since and he still hasn't gotten back to me, hmmmm??  I will keep you all post on the outcome. My 2 yr short sale anniversary is not till 2/11/13, I'm thinking it's because of this. Nevertheless, I have to wait til the following day to seek pre-approval. 

Permalink Reply by Diane Block on January 30, 2013 at 8:41am

Yadira, I hope it works out somehow.  Our 2 years was 8/12 and the following date we tried and pulled credit, and ran DU and that's when this mess started. The DU came back with "Foreclosure" on Chase. We have since been battling it out and finally got Experian to update credit. This is what the lender office sent me yesterday:  

.   Settled or settlement accepted typically trigger that response.   The rule for foreclosures is 7 years but short sale can be done after 2 years with 20% down and  DU (automated) approval.   It is not a something that we can have manually underwritten, we need the automated approval/accept.    

Now feeling like there is no more I can do unless I can get the Chase CO deleted. We may have to wait until this August which will be 3 years and have to go FHA loan and have to pay PMI! Which is what we were trying to avoid!  I'll keep you posted if something changes and God gives us a miracle :)

Permalink Reply by yadira delacruz on January 30, 2013 at 10:48am

Hello Diane, 

According to my Realtor shorts sales can no longer be labeled as CO (Charge Off). I have not looked into it in detail, but I submitted a dispute to have the CO changed. Seems like you tried it all and I may be reinventing the wheel. In any event, once I get a hold of the Mortgage Broker that claims he got me approved In DU and if it in fact it's true, I will inbox you his info. 

Permalink Reply by Diane Block on January 30, 2013 at 11:40am

Thanks!  The law changed as of 7/2011 where banks can no longer report a short sale on your credit.  Its California Legislation Code 580e.  Unfortunately for us ours took place 8/10 and is not retroactive.  

I am in California

Permalink Reply by Sara Wildey on January 30, 2013 at 11:47am

hi Diane,

 

I'm a direct mortgage lender I had this issue with my buyer and I was able to get it fixed within an wee, reran my DU and it went through. I worked directly with our credit services vendor, it seems that trying to work directly with Experian does not seem effective in a quicker result. I'm also in CA and am a direct mortgage lender, if you are interest in discussing email me at [email protected]

Sincerely,

Sara

 

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