How is it possible to get approved for a mortgage with 4 collections?

Yep. Do it all the time. In some cases we don't even have to pay off the collections. Only six month's on the job? I've done loans for college grads and just had to wait for the second pay stub. That's right, only one month of employment history. It sounds like you want to hear "They don't qualify!", but the fact is, they obviously had good enough scores, good enough income, good enough ratios, etc, or they would not have been approved. The truth is you don't have enough of the facts to make that kind of a judgment call, but it is obvious the underwriter did. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com ~ 888-889-9950

Stonegate Mortgage is a direct Fannie Mae and Ginnie Mae (Gov't loans) lender. We follow the underwriting guidelines with minimal underwriting overlays. I recently closed a loan where the borrowers had NO credit at all, including no scores, less than 2 years job history and they used a State Gov't down payment assistance program. They came to the table with $38. They had several open medical collections. The rule of thumb with collections is if the total of collections is less than $1000 and they are over 2 years old and do not affect titel, then they can be left open. The gov't insurend or guranteed loan guidelines are much more lenient than conventional underwriting guidelines and can allow for this. If you have other questions, do not hesitate to call on me.

I do agree with Larry, but I can tell you that I do have some investors that require at least 3 tradelines, 1 with a 24 month history & 2 trades with a 12 month history. I also have a couple of Investors that do not require the above as long as when the loan is run through the automated underwriting engine & we get an approval then your good to go. You didn't mention what type of loan the person received.If you want to discuss what options you may have give my office a call, I am located in Murfreesboro, TN.Nancy RelefordHome Equity Mortgage, LLC615-867-3060

As usual, the "devil is in the details". As others have said, the collections by themselves are not necessarily the issue. If they are old probably not an issue, if they are new paying them off could be the answer. However, the total application profile makes a big difference: the rest of their credit and actual credit score, downpayment being made, type of income, etc. What one lender won't approve sometimes another will - I get those referrals all the time, and sometimes I have to refer a loan that I don't have the right options for to someone else as well.