It is beyond me that the mortgage company would not give the borrower advice on how exactly to proceed. I would speak with a mortgage broker.....believe me he willl steer you in the right direction. This very thing happened to me a few weeks ago when a potential buyer (My Client) could not be pre approved for a loan. The mortgage broker told my client what exactly he needed to do in order to qualify for the loan. Long story short, my client will be able to qualify for a loan in Jan 2010 after filing his next tax return. My client is happy that I steered him in the right direction and will use me to purchase his home next year. Hope this helps.

There's not much you can do except maintain contact with the buyer until he's cleaned up his credit and puts himself in a position of being ready and able to purchase a home. Hopefully the mortgage lender is willing to help your buyer do just that by offering some "counseling" to help your buyer imporve his overall credit.

Brian: We don't encounter this very often, but I would try to find out why the client was declined for a loan and see what needs to be done to correct the situation. Pay off credit cards? Accumulate more down payment? Bring in another borrower? Clean up FICO score? Every problem has a solution...or it's not a problem.

The borrower should first persist on having the mortgage company or bank work something out with him or her. The last thing the bank wants it to deal with taking the home and having to sell it. In the meantime, the Realtor can have the borrower talk to as many mortgage companies or loan officers that the Realtor has a relationship with to gather as much information to help them work something out with the bank.

My first response would be not to deal with them because if they have a history of not paying what will give a lender the assurance that the borrower will pay them?