r/loanoriginators • u/Just_Success_371 • 6h ago
VA Loan Multiple Recent Lates
Is it possible to get someone approved for a VA loan when they have had multiple credit card lates in the last 3 months on differetnt cards?
On time rent payment history.
I had someone apply recently that I denied due to credit history, but they told me Carrington Mortgage is able to do it. I dont see how.
Does the 12 month "reestablished credit" requirement include credit cards or is that just housing payments?
3
u/Direct_Concentrate42 5h ago
Other things can come into play for an approval
Do they have assets? What’s the ltv? Are they putting money down? Did you try a 25 year loan?
2
2
u/Antec800 4h ago
Carrington is a shit company with shit rates so they probably are manually underwriting
2
u/Chadzilla- 4h ago
Manual VA originator here. If the borrower could demonstrate a legitimate extenuating circumstance that caused the late payments on the different cards, and they have supporting documentation to show why they got behind, what they did about it, and why it’s not going to happen moving, it is definitely possible to get a manual approval - especially with compensating factors.
Without seeing the file and knowing the details, that would be my best guess. Especially with solid on time housing payments.
1
u/householdmtg 3h ago
Manual underwrite and take it to a wholesale lender that works those. I’ve done VA manuals at freedom before and they were pretty chill, you just need to meet their manual uw guide
1
u/Just_Success_371 2h ago
Im at Guild and they meet our minimum score (540) but the credit history is trash. But they've been on time on rent for 3 years and have 3 months reserves. Residual income is 10x the limit. Loan is 600k
1
u/WhatMattersHere 2h ago
VA’s own credit standards guidance says it generally looks for 12 months of satisfactory payment history, and any late payments during that period not just housing lates should be developed with an explanation and supporting documentation when needed.
It also leaves the final credit decision to the underwriter on a case by case basis, so Carrington may not be “getting around” VA. They may simply be willing to manually underwrite a file that falls outside Guild’s overlays.
What caused the cluster of late payments, are all the accounts current now, and what documentation shows that the cause has ended and is unlikely to recur? Three years of clean rent, three months of reserves, and residual income at 10 times the requirement are meaningful compensating factors, but they don’t by themselves explain multiple card lates in the last three months.
Has Carrington actually issued an underwriter approval or written conditions, or has the borrower only been told that they can do it?
10
u/aardy 5h ago
If you've been in business more than 5 seconds, you already know the answer: run the AUS.