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Recently, Underwriting guidelines have changed.  You can no longer have a disputed account on your credit report and get approved for a mortgage.  It must be removed, in order to get approved.  When you have a disputed account it is taken out of the scoring model, causing the underwriter to not get a fair and complete picture of your credit situation.  You must get this disputed account removed before the file goes into underwriting.  Keep in mind the process of removing a disputed account can take 30-60 days.  Here is my suggested process to remove a disputed account:

1. Write a letter to the credit agency asking them to remove the language stating the disputed account.  Please understand that the process of investigating the account can take 30 days in itself.
2. At the same time that you are doing #1, you will also want to write a letter to the creditor(that you are disputing) stating "that this account is no longer in dispute" and to remove it.
3. The next step is to WAIT!  You do not want to hound the creditor or agency, or send more then one request.  When you send another request it can start the process all over.    
4. Pull a new credit report 35-40+ days after you do #1 and #2.  At this time hopefully it shows the account is no longer in dispute.

Fannie Mae, Freddie Mac and HUD(FHA) have all adopted this new guideline.  It is possible to get an exception if there is just one account in dispute or on a FHA loan(if there is more then one).  But I would not assume this and prepare your buyer that this could be a problem.   Keep in mind that if this disputed account is not caught until a file is in underwriting, it could cause your closing to be delayed or worse case you not getting approved.  Please call or email me with any questions.