It’s been a while since I’ve had time to surface and write you. We’ve been rather busy, but this one can’t wait.
I’ve written about Collection Triggers before, however, there is a new player in town and I wanted to make you aware of it.
If you don’t recall, ‘collection triggers’ are ‘triggers’ for collection agencies. Meaning, when you take an action, such as an inquiry, updated address, new account, new employment, pretty much anything, that may provide a ‘trigger’ to a collection agency, or debt buyer to pursue you.
Lately, we’ve been getting a lot of calls (two yesterday) from folks needing advice/services because they just went for a mortgage and now they have a collection account on their credit report.
One gentleman called up and spoke to Scotty. He was an 800 credit scores, qualified no problem, and then boom, just before closing, his score dropped, most times, the score drops a lot.
This is not a fear tactic folks, this is education. We really can’t do much once the collection is already on the report, because if you start to poke it, we run a high risk of having dispute comments on the tradeline which can also screw up a mortgage, so unfortunately, if the underwriter requires the account be paid, the account gets paid. Hence ‘collection trigger’. It is highly effective.
Now, the collection agency is supposed to issue out a letter PRIOR to putting a new collection like that on the credit report. It is called a ‘debt validation letter’, which I have written about somewhere here. If they do that, it buys us time, usually enough to close. But, with out knowing exactly what they look like, many consumers ignore them if they receive them. Hence the reason why we suggest our clients stick with us just in case so we can act in the last minute. It many times makes the difference between closing and not closing.
Regardless, I wanted to write an updated article on this because we have a new player offering ‘Collection Triggers’, your friendly mortgage trimerge provider. That’s right gang, the same company that provides your lender a credit report to determine if you are approved for a mortgage, also throws you under the bus by notifying collection agencies that you may be in a position to pay them.
I invite you to google it. I am a bit leery of posting the info here, as we do not own that content, but check it out. www.corelogic.com/solutions/collection-triggers.aspx
So… this is simply a heads up to our friends out there, hoping to secure a home for your family. Keep an eye on the mail, oh say two weeks after that mortgage inquiry. If something weird appears from a collection agency regarding a debt you do not recognize, give us a call. We may be able to provide guidance.