Financing in Temecula>Question Details

dizzzymissli…, Home Buyer in Temecula, CA

Help! Verification of Employment gone too far

Asked by dizzzymisslizzy, Temecula, CA Wed Mar 13, 2013

In the process of buying a home, should have been approved yesterday but the underwriter (at a bank) wants a referral letter from boss saying that I am a good employee and will be staying with the company for some time. BACKGROUND: I have worked for the same company for 3 years. Started out as a 1099 contractor and then the company got into trouble with the IRS for incorrectly classifying the employees as contractors. Midway through my second year working there, the company was forced to change me to a W2 employee and began using a TEMP Agency (for obvious reasons of saving money) to process my paychecks. Why is this so complicated for the underwriter to understand what seems to me to be common sense? Is this a normal practice? Can I get approved elsewhere before escrow closes on APRIL 1?

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7
Dizzymisslizzy,

Just remember, nobody is indispensable, meaning nobody's job is guaranteed. Given that fact, the UTR is trying to determined the probability of continued employment. I said the PROBABILITY of continued employment. I have had many cases like yours over the years where someone has been working at the same company for several years but was contracted through a Temp Agency. That doesn't mean that the person was a PART TIME employee. Someone can legitimately work full time for a Temp Agency, and I don't why that is so hard for an UTR to understand, but some times they need to be reminded. Your only problem was that your Loan Officer didn't take the time to help you write a GOOD LOE (letter of explanation) regarding your work history and help the UTR connect the dots by focusing on the real issue. And that is....you are employed! You have three years history working the same position, just paid by a different entity. It's no different than working as a Construction Worker, who could have 15 different W-2s it just doesn't matter!!!! If you are paid hourly we MUST average your income for the past two years period. It's a no brainer for an experienced LO. Try to work it out with your current Loan Officer but if that doesn't work, PLEASE call me, I will close your deal. Just withdraw the application before you receive a Mortgage Credit Reject from the lender that WILL follow you for some time to come.

Best of Luck!
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Wed Mar 13, 2013
There are ways in which this letter can be written. I do remember when you had asked for advice earlier and there were several different questions you had asked. As you can tell from all the answers from all the questions you asked, depending upon the experience level of the loan officer is whether you are going to be successful or not.

I suggest you get with your loan officer and see how you can structure your letter that will appease your underwriter. If your loan officer isn't able to work with this, then maybe you might want to consider moving. Closing by the end of the month may not be completely possible depending on the type of loan you are working with so since time is of the essence, deciding whether your current lender has sufficient skills should be done quickly.
0 votes Thank Flag Link Wed Mar 13, 2013
The pendulum has swung the other way since the liar loan days of a few years ago. And yes, some underwriters are going just a tad overboard. But remember, they are responsible for making good loans; their job and career is on the line. put your self in the underwriter and lender's position: what would it take for you to be comfortable lending hundreds of thousands of dollars to a complete stranger? The answer is you'd want an air tight loan file that wouldn't come back to bite you. The Letter of Explanation being requested by the underwriter is not unusual in today's stricter loan environment. Write the letter and close the loan. Being able to go to another Lender and close in two weeks is highly improbable and risky. Dale Tillman / The Loan Source / 951-699-6890 / http://www.HarpInfoSite.com
0 votes Thank Flag Link Wed Mar 13, 2013
Both excellent lenders with spot on answers for you on this. Since all the foreclosures hit the market, underwriting has become much more stringent. Your loan officer should have had this set up from the beginning. Changes horses at the moment isn't recommended until you see a wall (denial letter).

Sadly it's not going to become easier until stability hits the market. Until then, you and everyone else will have to sharpen the ol' writing skills and fill in the blanks for the underwriters.

A lot of these issues need to be addressed in the beginning way before you get into escrow.
0 votes Thank Flag Link Wed Mar 13, 2013
There have been so many odd conditions to prcuring a loan these days, this particular situation doesn't surprise me. I just closed an escrow where the buyers for my listing changed lenders 2 weeks b4 the close. Voice your concerns with you Realtor and lender face to face.
0 votes Thank Flag Link Wed Mar 13, 2013
The lender is trying to determine the stability of your job and income. After all, technically you work for a temp agency, right? This isn't like financing a car where they don't verify anything and then hope to God they can get you a loan after you sign and drive off the lot.

Your lender should have prepared a well written letter (think timeline) to explain what has happened the last three years. Did they have you do that? What seems like common sense for you is not the same for someone who knows nothing of your work history or that company.

To ask for a simple letter to explain this is not a huge deal.

You can't run from this.....all lenders are going to need detailed clarification on this. Just ask your Loan Officer why they failed to submit a better loan package and to do it right this time.

I say stick with them for now. if you need help, contact me (951) 215-6119.
Web Reference: http://homeloanartist.com/
0 votes Thank Flag Link Wed Mar 13, 2013
Dear Lizzy, not all lenders underwrite the same and it may be as simple as getting an explanation letter from your employer explaining what you just told us.
The underwriter is just being careful and you're paying the price for the sins of the past.
To start with another lender this far into the transaction your chances of closing by April 1 are pretty slim.
Good Luck!
0 votes Thank Flag Link Wed Mar 13, 2013
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