Help with Credit Repair
by Dennis from Arizona
Ask Kate for help with credit repair after past due mortgage payments: Dennis set up auto-pay for his elderly mother's mortgage payments. But he found out yesterday that the mortgage went 60 days without payment... right as he is helping her buy and finance another rental property. He's asking me how this credit mess can be fixed.
Hi Kate, I manage my mom's affairs since she is elderly and more than willing to accept my help. I have, over the last couple of years, been working hard to take care of her day-to-day needs as well as increase her net worth. I want her money to last as long as she does, and in this economy, with stocks and real estate taking hits, it has not been easy.
We are seeing a turnaround in the real estate market here in Arizona, so I bought her an investment property. I worked on it for six months or so and we sold it for a nice profit.
I then set about finding a new investment property. That was a much tougher challenge as the market has completely flip flopped and buying a house is a real pain.
To buy an investment property with potential I was up against all the investors grabbing up the last of the forclosures, with cash, at way above asking prices.
After a month of making offers we were finally accepted for one. A nice property actually, with potential I hope.
Shortly after buying the first property I was setting mom up with online banking. I had all of her bills being payed online. She was beginning to miss important stuff, and the regular routine of writing checks was getting too much for her.
All the bills with fluctuating amounts I take care of monthly by simply adding the amount, the date, and hitting the pay button. Those with the same amount each month I set to auto pay. The same day each month and the same amount each month, the bill is paid.
I did that with the house payment for the investment property. It was not long after we received a late notice. I went back in to the account and reset the auto pay.
In the next couple of months, I was finishing the house to get it listed, I was also rounding up all the paperwork for both mine and mom's taxes. It was a busy couple of months, the next late notice was lost in the shuffle.
The house sold, the new one was bought, and a new loan applied for. Shortly after, my mortgage manager called me to say we had a slight problem. The payment on the house we just sold was over 30 days past-due. I got on the internet and to see what was going on, and sure enough, no payments had been made.
I sent one off immediately and then called the title company to see if I could get another payment made before the closing. She said it was too late, that it would all get straightened out when the house closed.
After writing a letter of explanation for the mortgage company, they were just about ready to okay the loan, but did one last credit check. This time it showed 60 days past due and they said no way, not until the credit agencies reversed it.
We put together the payment statements as well as the closing documents and sent to the agencies. One of them overturned the 60 days, the other two asked for a letter from the mortgage company stating it was not past 30 days.
This nationwide mortgage company's support staff are the most unhelpful people I have ever talked to, they could care less. Do you have any ideas where I could go for help within the bank, or what else I could do for the credit agencies to correct this mistake, one I feel so responsible for.
It is like I have said to everyone, the lady keeps 50K in a checking account, she is not hurting for money and would never intentionally make a late payment. Will they listen to that? Not.
When you have time Kate, let me know what you think. Dennis
Kate Answers: Help with Credit Repair - Past Due Mortgage Payments
I feel so badly reading your letter, for you and for your mother.
Dennis, you are not the only one to learn this the hard way. I have seen many other mortgage borrowers in the same boat.
So first, I'd like to point out a couple of lessons.
Help with Credit Repair - What Not to Do Lessons
1. Do not assume automatic payment systems actually pay your bills on time. It's best to expect that they don't and then follow up each month to verify payment. An inconvenience contrary to the nature of the auto-pay concept, but a reality nonetheless.
2. When selling a home, do not discontinue making payments. You never know when closing will be delayed.
3. Do not depend on escrow to make your mortgage payments on your behalf. Pay them yourself and get a receipt to verify payment to escrow.
4. Don't assume the final mortgage pay-off was made in full by escrow. Verify!
You know what I say. It's YOUR
mortgage and no one cares more about it than YOU
Help with Credit Repair - Where to Begin Lessons
So moving on, how can you slow down the train to repair Mom's credit so you can speed up the train to close the mortgage before the purchase and sales agreement expires?
1. Contact the online bank who handles the payment of Mom's bills. I'd pressure them to write a letter since it's their glitch that snowballed into this mess. The correspondence should include the details of your account setup, account numbers, and the date they were instructed to pay the mortgage each month.
2. Take their letter and any supporting paperwork from your account set-up back to the mortgage company. This way it is not just your word. Request another letter from them to submit to the 3 major credit reporting agencies
3. Give a copy of the letter from the online bank and any supporting documentation to your loan originator providing the home loan for the investment property.
Help with Credit Repair
You might want to consider a reputable credit repair firm if the job seems too big to handle yourself.
Many times, the initial credit repair consultation is free. Ask if you'll receive a free credit report following the consultation.
My best wishes to both you and your mother,
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