Question Details

kjac, Home Buyer in 90806

Mortgage Loan Disapproval

Asked by kjac, 90806 Mon Jun 7, 2010

I opened escrow on a home in May and have recently been told by my loan officer that our credit score dropped (although I have no idea how!) and I am not qualified for the loan anymore. I am totally fine with this and asked my loan officer for a loan disapproval notification so I could send it to the seller and escrow company. He later stated that the lender would not send a disapproval letter but would just stop working on it because we are not qualified.

Am I totally wrong or does this seem ridiculous? What other way would we know if we were disapproved for the loan unless we received notification of a disapproval?

I need this notification so I will not lose my earnest deposit!

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Answers

4
You are entitled to a denial letter. Tell the lender that you will contact the State licencing board it they do not assist you!

It is silly the way some of the lenders are responding in this crazy market.

Good Luck!

Gerry Dunn
Associate Broker

Serving Maryland, D.C. and Northern Virginia
301-651-8600
0 votes Thank Flag Link Tue Jun 8, 2010
Hi, Kjac

Sorry to hear about your problems. When was your last credit report pulled? They're good for 90 days before a new has to be pulled. Furthermore, if your score did drop then that is grounds for a denial and a denial letter stating this. A lender should not have a problem supplying this to you, your agent, the listing agent, and the escrow agency/title co. Its required. If this is the actual and a legitimate reason, I'm at a lost as to why your lender is not forthcoming with it. Again, we're required to do so.
0 votes Thank Flag Link Mon Jun 7, 2010
Kjac,

Just ask your realtor to write up the cancellation of escrow note what the reason is and send it off. Your lender and the escrow company do communicate with each other.
0 votes Thank Flag Link Mon Jun 7, 2010
Ask your lender to tell you what changed. They ran your credit then and they ran it again now, so they can see what changed. If you were pre-approved months ago, then entered into escrow in May, something happened in the meantime. Did you use up more of your available credit than was used when you were first pre-approved? Definitely contact another lender, maybe a smaller, local lender who may have different standards, or can tell you what you need to do to get pre-approved again.
I never had a notification of disapproval sent to me, but I never had anyone not qualify when in escrow; I usually get a fresh pre-approval before submitting offers so they're not out-of-date. That way, no one wastes any time or money in escrow for a preventable reason. If my buyer wanted to cancel because he couldn't get a loan, I would just use the proper document stating the reason. Hopefully, you're within your loan contingency period.
0 votes Thank Flag Link Mon Jun 7, 2010
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