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Jack R., Lawyer
Category: Real Estate Law
Satisfied Customers: 6147
Experience:  Mediator, part of the Ohio Save the Dream Foreclosure project
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# My credit reports are bad right now. I am not paying 4 credit

### Resolved Question:

My credit reports are bad right now. I am not paying 4 credit cards in order to negotiate debt settlement. I received a letter from my mortgage company stating that I may be eligible for a HARP program (law changed). I checked the HARP qualification online info and it said you must be current on mortgage(s). I have a 2nd and I am current on both 1st and 2nd and I think I am at 95% of my home value in debt.

Would they consider me for refinance with the low credit score? Should I apply now or wait and risk not qualifying later. I could save about 3% if I refi.
Submitted: 3 years ago.
Category: Real Estate Law
Expert:  Jack R. replied 3 years ago.

Thank you for choosing Just Answer.

Under HARP 2.0 There is a minimum credit score of 620 needed to qualify for a HARP 2.0 loan. With 4 credit cards in default it is likely the score is below that value. You should get your credit score and see where you are. If the 3 credit scores vary widely the middle score is what will be considered.

Also, there is a maximum debt-to-income (DTI) ratio for HARP 2.0 participants. The maximum is 45%. This is computed by determining your monthly salary; determine your total monthly recurring debt (mortgage, credit cards, installment loans). Divide the monthly income into the monthly debt. Multiply the result by 100. The ending result must be 45%.

for example monthly income \$1000 monthly debt \$700.00;

DTI = Monthly debt / Monthly income 700/1000 =0.7 Multiply the ratio by 100 to convert to % ).7 x 100 = 70%. Number is XXXXX 45% so does not qualify.

Even if you do not qualify you should discuss with the lender. Ultimately it is the lender who can decide whether or not to modify the loan.

Please remember the to click on OK, GOOD or EXCELLENT SERVICE so I may get credit form my answer. If you have further questions please ask. Thank You !

.

Customer: replied 3 years ago.

I know I'm under 600 and sinking. My debt to income is ratio is high. I thought it would be best to settle cr cards before I apply. Then I'd be able to begin restoring my credit score and have a better ratio. How long did they extent the HARP program? Interest rates are supposed to remain low for a year or so, right? My daughter's cosigned Student loans put me in this situation and she was 180 days past due before I started paying. Can't pay everything and keep paying my mortgages. I'm guessing I'll have cr cards mostly settled in the next few months.

Expert:  Jack R. replied 3 years ago.

Deadline has been extended to December 31, 2013. Eliminating the CC debt would improve your debt ratio. You still need to get your credit into the acceptable range.

Please remember the to click on OK, GOOD or EXCELLENT SERVICE so I may get credit form my answer. If you have further questions please ask. Thank You

Jack R., Lawyer
Category: Real Estate Law
Satisfied Customers: 6147
Experience: Mediator, part of the Ohio Save the Dream Foreclosure project
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