Financing in 80134>Question Details

thomasdstein…, Home Buyer in Denver, CO

FHA home loan Qualifying Questions? Declined by WellsFargo due to "compelling reasons"

Asked by thomasdsteiner, Denver, CO Mon Nov 18, 2013

Hi- My wife and I are trying to buy a home and Wells Fargo now told us that we don't qualify due to "compelling reasons" and that our front end ratio was to high for FHA. We were 40% on our front end and 44% on our back end for FHA. Are we to high of ratios? Thank you for the help....

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Robert Hanson’s answer
Hi Thomas,
I see that your question is a bit old, but has some recent activity on it!

I'm assuming that you worked this out back in November, but in case not, here is some additional info:

Around the last 3 or 4 months of 2013 Wells Fargo became very conservative in their debt ratios and I closed multiple loans for clients that hey would not for precisely the reason you describe. While 40% is in the high range for a front end ratio, if you are able to get an automated underwriting approval there are many lenders that should be ok with your debt ratios. I have found that once you go over 41% generally the loan becomes non-viable.

If you have a chance, update as to whether you were able to solve this issue! As rates are highjer now, I sincerely hope you completed your financing back then!


Robert L. Hanson
Gladewater National Bank
First Time Homebuyer Specialist

Direct: 240-752-7549
Cell: 301-651-7822
NMLS# 695929

Rate quote or live chat with me at the link below:
0 votes Thank Flag Link Wed Jan 8, 2014
44% back end is not too high at all for some lenders, I can take a look at your situation and make a recommendation to a lender that can help you out.
3 votes Thank Flag Link Mon Nov 18, 2013
Hi Thomas,

Wells Fargo is a great bank to keep your money in... Stable, good balance sheet, etc. They are not a great bank to get your initial loan from and funny they will probably purchase your loan once another lender is able to get you qualified...

You best option is ALWAYS a mortgage broker... There are many options for them to choose from they are in the business of getting you a loan... Not finding a loan that fits their loan guidelines as a Wells, Chase or other Big Bank or Credit Union...

Hope this helps!
0 votes Thank Flag Link Thu Jul 24, 2014
Dear Thomas:

It appears you have had some good replies to your question as it relates to how FHA works and I would concur.

I agree, that you should look at other options including going to a mortgage broker. I am not sure if you are a first time home buyer, and if so, there are some great programs that might be of assistance as well through a broker.

I have worked with several programs and am happy to share some possible ideas for you. Feel free to call me.

Best wishes!

Roxanne Fitzgerald
ReMax Professionals
0 votes Thank Flag Link Wed Jan 8, 2014

I would check with a mortgage broker who has more options for you in the purchase of a home. The big banks like Wells Fargo are not the best resource to consider even if you have all of your other accounts there.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
0 votes Thank Flag Link Thu Dec 19, 2013
FHA applications are generally run through an automated underwriting system - a computer program endorsed by Fannie Mae, Freddie Mac, and/or FHA - in order to arrive at an approval decision. While the back end ratio is only slightly above FHA's basic guidelines (31% front/43% back), the underwriting system in some cases grants approvals up to 55%. For some lenders, and automated approval is all that is needed. Other lenders impose their own stricter requirements, called lender overlays.

While it is not certain that this is what Wells has done, I wouldn't be surprised if that is the case. It could also be that there are other factors (low credit score, employment history, past derogatory items, etc) that are leading to a denial, it could just be that Wells' requirements are stricter.

You should check with another lender and not give up. I'd be glad to try and help if you want to email me or give me a call.


Tony Grech | Mortgage Loan Originator | NMLS 977416
PMAC Lending Services, Inc.
Toll-free (855) 642-4762 | Fax (248) 945-4842 | Direct (248) 728-0078
0 votes Thank Flag Link Tue Nov 19, 2013
wells fargo has already implemented changes that take affect next year. We still follow automated undewriting findings as far as debt to income ratio is concerned on FHA. If you would like help, feel free to contact me at
0 votes Thank Flag Link Tue Nov 19, 2013
I'd suggest finding a lender who works with multiple automated underwriting systems, as your DTI is on the high side. This will offer max flexibility, and a plan a, plan b approach. Most lenders (mortgage bankers) do not have FHA DTI overlays, and rely heavily on automated findings.

Michael Shotnik
Branch Manager
Colorado Mortgage
0 votes Thank Flag Link Tue Nov 19, 2013
I have had the pleasure of working with Michael on some recent loans and he is very knowledgable on the ins/ outs of particular loan types. Good points Michael.

Gary Gosz
Flag Tue Nov 19, 2013
I have a great LOCAL lender who can help you. Stay away from Quicken Loans. Please feel free to contact me directly, and I'd be happy to refer you to a couple of great loan originators.
0 votes Thank Flag Link Tue Nov 19, 2013
Your ratios are fine. I've been able to get over 50% done. If your credit is ok, then I can get your loan done. Give me a call (303)351-5500 Chae.
0 votes Thank Flag Link Mon Nov 18, 2013
Hi Thomas,

Wells Fargo seems to have more overlays. Also, some banks count overtime/bonus money differently. You might want to try a credit union or smaller bank. I have a great recommendation. Feel free to call me if you want a great referral. I just closed a loan with Elevations Credit Union... loved them!

Christina Ponich
0 votes Thank Flag Link Mon Nov 18, 2013
I will agree that your ratios are higher than the norm for an FHA loan, but your best bet is to talk to a lender who is well-qualified and experienced in FHA lending. There may be other loans that work for you and your wife that a mortgage broker would be better able to assist you with than a traditional bank. Give me a call to get a few number of some quality mortgage brokers who have worked well for my clients.

Teri Dillman
0 votes Thank Flag Link Mon Nov 18, 2013
Hi Thomas, in my experience 40% front end ratio is a bit high. Traditional FHA guidelines are 28/36. Is it possible for you to lower your purchase price to get your housing ratio more in line?
0 votes Thank Flag Link Mon Nov 18, 2013
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