1 derogatory mark & we can’t get a HELOC

[FFPPSSLLC]

We were scammed in 2012, paid off all debt, but 1 collections account which we pay monthly. Our credit score is 673, DTI less than 2%, we own our home, & have excellent “pay on time” score, but were denied for a desperately needed roof loan. We’ve only had 2 credit checks in years, but I don’t want to run that number up either. I really need some direction

[NCperson]

what is the approximate value of your home? what is the current balance of the mortgage(s)?  The percent of equity in the home will be the basis of any guidance. (equity % =  (home value - mortgage) / home value)

where did you go for the 'roof loan'? Bank? credit union? mortgage lender. etc? 

what was the reason for the denial? (the lender should have sent a letter explaining)

[FFPPSSLLC]

We own our home, it’s valued at approximately $80k. We applied at the Bank we use, Woodlands. They said it was only denied bc of the 2 accounts, still in collections since we were scammed 2012-2014 & we’ve been paying on them for 5 years, but the payments do not show up on any credit report. Since then, I settled one of them & also have reports proving our automatic payments. We applied for HELOC & need about $15K to repair the damage, replace the roof & spouting.

[NCperson]

How much is the current mortgage balance?

Are you making payments to a specific bank? Which one? (Different from woodlands? )

[FFPPSSLLC]

We don’t have a mortgage, we sold our farm & paid cash for a foreclosed house. So we own it & we own our cars. Only payments we make is on the outstanding loan in collections & low balance credit cards.

[NCperson]

since there is no mortgage, you are really in good shape - just an issue of finding the right institution to loan the money 

try working with a mortgage company - google 'mortgage companies in Williamsport, PA' ( i assume that is where you are because you mentioned Woodlands Bank). 

I'd call a number of them - because the amount you are seeking to borrow is relatively low, they may not be interested and / or could charge a lot to make the loan 

if there are any credit unions in the area, that could be an option

are there any community self-help organizations that can point you in the right direction?  Some communities have housing finance funds that would lend in situations like this

Make sure the lender clearly understandings that you own your home free and clear.  That is more important then the credit score given the small amont you are seeking to borrow

My point is since you own your home outright, and you are only looking to borrower $15k against a home worth $80K, you are simply not a big risk - just need to find the firm that sees it that way. 

Lastly, don't apply at a number of firms and let them pull your credit - all those 'pulls' will 'ding' your credit score even more.  Figure out who is most willing to make the loan given the credit score that you give them and THEN once you are happy with your choice, let that last firm pull the credit report.  make sense?

Good luck!  

[FFPPSSLLC]

I did what you told me to do, my mother-in-law (retired) contacted her Teacher’s Union bank & we’re about to apply with them. Since our denial in April by Woodlands, we settled one of the derogatory accounts & increased payments on the other account. Our DTI is down from 2% to 1% & we waited until all the credit card/debt pay offs we made cleared & reflected in our credit scores. So, if this loan app is denied, we’ll have 2 attempts on our record, then we’ll be in more trouble. Thank u very much!

[Carl]

This reminds me of a scenario I experienced about 10 years ago. At the time I had well over $200K in one bank spread among a checking account, savings account, money market account and a few other accounts. I needed about $5K to do some repairs to the back porch of a rental property I own. Upon checking was able to confirm I qualified for about a $25K signature loan at 13%. Applied for that since I could easily pay it off in a year or less without affecting my savings rate.

Everything was fine until I went to sign the paperwork and pick up the check. I was asked what the money was for. When I told them I was just fixing the back porch of a rental property the loan agent immediately pulled the paperwork and refused to give me the check because that was not the loan's "intended purpose". Well, it was the intended purpose and was clearly stated as such in the application.I wasn't going to argue.

I just left the loan officer's desk, walked over to a teller window and informed the teller to close all of my accounts immediately and give me my cash. When asked why I was closing the account, I told her why. She went and got the bank manager who was all apologetic and everything for the "innapropriate" actions of the loan officer. The loan officer had already shredded the check too. To the bank manager printed a new check and updated and reprinted the paperwork I needed to sign. I signed and walked out with the check in less than 5 minutes. Done deal.

Ever since then I've not seek that loan officer at that bank again, and I go in to that branch at least once a month without fail. Don't know if they got fired, transferred, demoted or what. Really don't care. Bottom line is, if it really had come to the point of me taking my money out of that bank and taking it to another, I would have just held back the $5K needed for the repairs and dealt with it that way.

The moral of the story is, money talks, B.S. walks.