Home Buying in 60653>Question Details

Jessica John…, Home Buyer in Chicago, IL

Loan In Suspension

Asked by Jessica Johnson, Chicago, IL Sun Dec 2, 2012

So I worked on my credit for a few months, and I was pre-approved for a mortgage with Wells Fargo. My original down payment was $3000 on a 142k purchase plus renovation (FHA 203K). Loan was sent to underwriting, they collected a $631 appraisal fee from me and my loan was suspended pending more documents. The underwriter wanted my birth certificate, more bank statements, and rental payment history. The underwriter put my loan as a "Government based plus 2", on borderline denial, due to lack of funds. I have almost $7k for dp with seller originally paying 6% closing costs but rejected offer for 3% due to it being a shortsale. My loan originator is now pressuring me to ask family members to gift me the $4500 the uw is looking for. I am getting extremely stressed and pressured, am I able to back out of it with my earnest deposit and return of appraisal money? My file was sent UW while negotiations was still in the works with the short sale lender, so no appraisal was performed yet.

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7
Sam Sharp’s answer
Hello Jessica
You are getting poor direction from Wells Fargo and you are not happy with their sevices. I suggest using a new lender. You should be able to get your application fee back from Wells Fargo if the appraisal hasnt been completed - it will take some pushing and you will most likely need to get a manager involved.
I would be happy to discuss your situation in further detail and I have recent experience with theCity Lift Program.
Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773 290 0455
0 votes Thank Flag Link Mon Dec 3, 2012
BEST ANSWER
Your contract should have a finance contingency clause which would allow you to cancel the agreement based on lack of funding. You cannot be forced into obtaining a gift from relatives by the underwriter. Sometimes it is wiser to move on than be bullied by a lender. There is another house out there for you. Consider the monies you have invested as a lesson learned. Short sales and REOs are not bargains. They are often costly and time wasting experiences. Talk to another lender. Do not get bullied.
0 votes Thank Flag Link Sun Dec 2, 2012
Wells Fargo are slow and with a lot of Administration , i sugest you to go with a local bank with a local underwrting ...
0 votes Thank Flag Link Tue Sep 24, 2013
Thanks everyone for you responses. Here is some more quick info, and maybe that can help with my qualification purposes.

My originial GFE stated "Cash from Borrower $3XXX". It may be due to a $15,000 grant that I have from Wells Fargo's City Lift Program. Now that the concessions from the seller has changed, they are asking to see an additional $4500. I can not come up with that amount of money in a couple days, but maybe in 60. It's the holiday season and I am not going to be a burden on my family asking them to gift me money. I was originally working with a broker, but his companies were not on the list of approved lenders for the grant, so I decided to go with Wells. The seller has agreed to 3% concession for closing costs, with cost being 6% of sales price in Illinois. My refund for school was only to be used for stuff I needed for school, I had no intentions to include that in my mortgage stuff, but are they automatically including it? Can they give me time to save for the additional closing costs, and am I able to pull out so that I can continue to save? Originally I wasn't going to get a mortgage until 2013, but that CITY Lift grant only allows you 60 days to find one, and I didn't want to let that grant go (There isnt many assistance programs in Chicago.)

According to my LO, the grant can only be used to bring the purchase price down, but not to assist with down payment or closing costs. I went to a workshop after I received the grant, and there were people saying that they were using it for their closing costs, so I guess it depends on the Lender. My LO stated that FHA does not allow the grant to be used toward closing, and the only way I could use it toward closing costs would be to go conventional. I qualify credit score wise for conventional, but not in other ways according to LO. IDK I am confused.

About my LO..He was great in the beginning, but now that it is getting tough he's just beginning to tell me things I feel like should have been said in the beginning. He knew how much money I had saved because I told him the exact amount. I also told him that my family does not have much money, I'm sorry I don't have any wealthy family members and my mom and father is tight. If there was concern with reserves, I would have continued to save not embark on the mortgage journey if there was some uncertainty on their part with funds. Also, he should have told me about proper documentation of deposits here on out, he did not disclose that to me so I am losing faith with his integrity.
0 votes Thank Flag Link Sun Dec 2, 2012
Talk to your Realtor and Attorney. Do you have one or the other? You probably cannot get the financing fees back but the EM should be refundable being that you do not qualify for the loan.
0 votes Thank Flag Link Sun Dec 2, 2012
You can back out of you cannot retrieve the financing however it all depends on how your contract is written up. If you are performing on your end of the contract however with the financing terms in your contract not allowing you to get financed then you can't close and should be able to get your earnest money back however no money for appraisal.



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0 votes Thank Flag Link Sun Dec 2, 2012
I just answered this on zillow. Good luck! I think you will need it.
0 votes Thank Flag Link Sun Dec 2, 2012
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