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Thread: Help! One late mortgage payment, how to get it removed?

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    Default Help! One late mortgage payment, how to get it removed?

    Hi guys, please help, I know you can! My husband and I are buying a house and in the process of the credit check one late mortgage payment was uncovered from his previous house loan. The late payment was a mistake, he was on auto pay and his loan was sold to a new lender (penny Mac) and he is so busy he never has time to check his mail, I was part of the mistake too, as I was unfamiliar with Penny Mac and thought it was junk mail. The auto pay stopped forwarding of his payment ( since it had changed hands) and a late payment was recorded. Because of this late payment his credit went from 720 to 655 making us ineligible for a jumbo loan with 10% down at 4.25 percent interest rate. We really want this house and can afford it but think that this one time ding should not result in us having to put down 20% and mortgage insurance!

    PS - I'm in real estate and this isn't a case of us buying a house we can't afford, we just don't want to tie up more liquid assets that could be used for investments etc..

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    Default Re: Help! One late mortgage payment, how to get it removed?

    Contact all three credit rating agencies and officially challenge this late payment entry. There's a good chance the entry might be removed due to 'extenuating circumstances'. But on the flip side, from a factual standpoint the receipt of your payment by the ( new ) mortgage holder was actually late. As such the late payment report may not be removed - leaving you with a choice of waiting 39 months until the late payment report 'ages' off your credit reports, or accepting the more 'expensive' terms of the 'subprime' mortgage deal you are presently being offered.

    As you just discovered, even for people with decent paying 'straight' jobs, today's expected borrower's credit rating - expected down payment percentage - and expected 'insurance' costs - are far less favorable than they were just a few years ago. For the benefit of other SW readers, I would point out that 'self-employed' dancers, camgirls and escorts are likely to automatically be excluded from 'prime' mortgage deals ( i.e. the OP's 10% down, 4.25% interest rate, zero mortgage insurance ) and pushed into 'subprime' mortgage deals ( i.e. the OP's 20% down, unstated higher interest rate, plus mortgage insurance ) simply on the basis of not having a 'straight' job / being self-employed.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    Thanks Melonie, we wrote a good will letter this morning to Pennymac to remove the late payment, so our fingers are crossed, if they approve us, we will move into the next phase of making sure it's off the credit reports. From what I'm being told there is a law saying anytime a mortgage is sold the new company must notify within 30 days AND forgive the first late payment.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    From what I'm being told there is a law saying anytime a mortgage is sold the new company must notify within 30 days AND forgive the first late payment
    Well, the law says that the new mortgage company can't charge late fees. Unfortunately, it doesn't specifically address the issue of reporting a late payment to the credit reporting agencies. Hopefully PennyMac will 'relent' and help you out. If they don't, you also have the option of raising the issue directly to the three credit reporting agencies themselves.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    That's true, we are awaiting a response from their research team which is the next level after supervisor, apparently a supervisor looked over husbands good will letter and he also supplied the actual bank record of the funds being automatically sent to what was by then the wrong company, and approved him for consideration of removal from the credit report but said the final decision will be made in 72 hours after the research team has looked at it. If they remove it we will then have a rapid rescore of his credit done. I'll keep everyone posted as I think this issue might help others. Sorry for the run on sentences, so tired!

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    Default Re: Help! One late mortgage payment, how to get it removed?

    ^^^ well, if in fact you have bank documentation that you did make the mortgage payment on time ... albeit to the 'wrong' company ... this should be a 'no brainer' in regard to removal.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    Quote Originally Posted by Melonie View Post
    Contact all three credit rating agencies and officially challenge this late payment entry. There's a good chance the entry might be removed due to 'extenuating circumstances'. But on the flip side, from a factual standpoint the receipt of your payment by the ( new ) mortgage holder was actually late. As such the late payment report may not be removed - leaving you with a choice of waiting 39 months until the late payment report 'ages' off your credit reports, or accepting the more 'expensive' terms of the 'subprime' mortgage deal you are presently being offered.

    As you just discovered, even for people with decent paying 'straight' jobs, today's expected borrower's credit rating - expected down payment percentage - and expected 'insurance' costs - are far less favorable than they were just a few years ago. For the benefit of other SW readers, I would point out that 'self-employed' dancers, camgirls and escorts are likely to automatically be excluded from 'prime' mortgage deals ( i.e. the OP's 10% down, 4.25% interest rate, zero mortgage insurance ) and pushed into 'subprime' mortgage deals ( i.e. the OP's 20% down, unstated higher interest rate, plus mortgage insurance ) simply on the basis of not having a 'straight' job / being self-employed.

    you can do that but count on a few months until that is resolved. And while the dispute is open you cannot get a mortgage at all. And by the time that is over the house you want might not be available anymore/is definitely going to cost more.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    Actually no dispute was opened as we went straight to the source (pennymac) right now we are waiting on a deletion letter back from PennyMac which we were promised a response in 72 hours, as long as we have the letter the home builder has agreed to wait out the rapid rescore which can be done well, rapidly. We have given our $25,000 earnest money and I'm in the business so I doubt we will lose the house. If no deletion letter comes we will probably end up just putting more money down as a last resort.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    And we were offered a different mortgage so we are still eligible for a mortgage, but the interest rate will be higher (5%) with mortgage insurance and more money down.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    Quote Originally Posted by Melonie View Post
    ^^^ well, if in fact you have bank documentation that you did make the mortgage payment on time ... albeit to the 'wrong' company ... this should be a 'no brainer' in regard to removal.
    Thanks, I hope so, we were told to expect a fax today which still hasn't arrived, so we will see!

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    Default Re: Help! One late mortgage payment, how to get it removed?

    Quote Originally Posted by Melonie View Post
    ^^^ well, if in fact you have bank documentation that you did make the mortgage payment on time ... albeit to the 'wrong' company ... this should be a 'no brainer' in regard to removal.
    Thanks, I hope so, we were told to expect a fax today which still hasn't arrived, so we will see!

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    Default Re: Help! One late mortgage payment, how to get it removed?

    An old friend of mine had this happen to him and his wife back in the late 1990s...I'm starting to think mortgage co.s have people paid specifically to comb through records and look for technicalities to bill people for....

    Also, I know a lot of people make mortgage payments in person....If you can, not a bad idea. Doesn't allow for awkward "check's in the mail" situations.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    The fastest way to resolve this is to dispute the late payment with the credit reporting agencies. PennyMc does not have a vested interest in correcting this issue or they already would have. The chances of them responding are small. But when you file a dispute with the credit repoting agencies they are required by federal law to investigate. They will contact PennyMc. PennyMc wont respond to them. When they don't respond the credit reporting agencies are required by law to remove the negative item. The credit reporting agencies may also ask for you documentation. The dispute process may take up to 60 days.

    Good luck
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: Help! One late mortgage payment, how to get it removed?

    Good news! A Penny Mac supervisor decided to remove the late payment report! We will be receiving a fax on Monday confirming the deletion and we will be doing a rapid rescore . Here is the process for those who want the quick story, we had a late mortgage payment after our house loan was bought by a new company (PennyMac) We had been on auto pay with the old mortgage company. Our mortgage payment was returned to the bank resulting in the new company not receiving the payment and a late payment being recorded. This brought our credit score down to 665 from 720. We wrote a goodwill letter and sent proof of the auto-pay in our bank statements. After a pennymac supervisor looked at our paperwork, she recommended it be removed, it was sent to their research dept which took 3 days, they then responded with a removal of the late pay.
    Last edited by Ninelives; 11-21-2014 at 10:41 PM.

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    Default Re: Help! One late mortgage payment, how to get it removed?

    yay congrats!!!!

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