In order to get approved for a Kentucky VA loan with outstanding collections and charge offs listed on
Collections & Charge Offs are two different things. Below is what VA saying about them:
2 different topics best if you can send me credit to review.
· Charged off accounts generally ignored
· Collection accounts on Federal debt are a big issue so we careful there
· Collections not required to be paid off unless they are extremely high
· Manual Underwrite we do require an LOE from Veteran for collections
· What happened, what they did to resolve, what are they doing in the future to either resolve or to prevent this from happening and finally if they are going to enter into a payment plan or not. Ultimately on the resolution of the collection the UW does not care but VA requires that as part of LOE.
Hope this helps send me credit for full evaluation.
The VA underwriter will want to verify the Kentucky Mortgage Veteran has the ability to pay these items or will want to know how they were paid off before closing.
Any collection or charge off showing as a judgement or lien on the VA mortgage applicant's credit report, must be paid before closing. These affect the title and must be paid before the mortgage is recorded.