If a collection/charge off is showing 0% balance but paid, is that a red flag for funding results? LH

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  4. If a collection/charge off is showing 0% balance but paid, is that a red flag for funding results? LH

Yes, it is still a red flag for underwriters and automated systems. Just because its paid in full doesnt defeat the fact that at one time or another that client got behing on making their payments with the lender and it resulted in a collection or charge off. If client still wants to proceed with funding, set the proper expectation that their funding results will be limited and DO NOT submit them with RMs, only run manualy apps. (LH)

Written by Corey Last updated October 20, 2023
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