Home Buying in Miami>Question Details

Alejandro Pa…,  in Coconut Grove, FL

Our financials, credit and income are all in order and now Lender is denying loan due to our Realtor being on a "blacklist". How can this?

Asked by Alejandro Paret, Coconut Grove, FL Sat Dec 22, 2012

be? I have a similar situation with the home I am trying to purchase now. It is my wife and I's first home for our new family (7 month old son). It is the perfect house for us and we even waited an entire year to get the short-sale approved. We started the loan application on Nov. 1st and quickly provided everything the lender asked for yet they took their sweet time in submitting the loan to underwriting. The lender is Gibraltar Private out of Coral Gables, FL which is using Flagstar to underwrite the FHA loan. We have everything in order, credit score, income, assets yet after 45 days they came back to tell us the loan is denied due to the realtor being on Flagstar's "blacklist". How is this even possible? What does the realtor have to do with our loan application? We even offered to remove him from the contract and not pay a buyer's commission and they still refused to proceed with the loan. Has any one ever heard of anything like this?

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Such a list does exist with HUD.It does not have many names but does contain the names of real estate agents.

I don't know how one gets on this list but I shall keep digging.
2 votes Thank Flag Link Sat Dec 22, 2012
Check to see if the broker is on the blacklist as well. If they are, ask an attorney, but it would seem to me you should be able to get out of any buyers' agreement with them. If not, ask the broker to step in for assistance.
1 vote Thank Flag Link Sat Dec 29, 2012
Good morning Alejandro,

Since you are applying for an FHA Insured mortgage loan we Lenders are required to verify that ALL participants in the transaction are vetted on the LDP or Limited Denial of Participation list with FHA/HUD before approving/closing an FHA loan.

Sounds like that is what happened here.

It does not matter what Lender you go to: if the Realtor is on the LDP list you cannot obtain an FHA mortgage.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
1 vote Thank Flag Link Thu Dec 27, 2012
Many applauds for hanging in there for the duration of the unrelenting abuse a buyer experiences in a short sale transaction. In this 'Wild, Wild, West of Real Estate," called short sales you have revealed yet another adoration emanating for the bowel of the financial industry.
Be aware, where short sales are involved, anything can and does happen.

Assess if you can purchase without FHA backing or get rid of Flagstar. (this may be time critical) However, I suspect this is more likely sourced from FHA.

On the letter head of the lender along with the name of the writer, get the "Black List' statement.
Please be prepared to share it, verbatim, with us here.

Present this document to your agents broker.

The broker will have the attorney who is on retainer OR the attorney for the local REALTOR (r) organization send urgent correspondence to the "Black List' originator.

Now, lets be honest about this. It is easy to cast condemnation on the agent. Banking institutions, since being robed in "too big to fail' regalia are free to do what ever they please to appease the investor to whom they intend to sell the mortgage. Too big to fail means to big to govern.
Of course there is an agent element to consider. The agent may have inadvertently, engaged an 'investor type': in the past who got dinged. Your agent may be deemed guilty by association. The agetn may have engaged someone who has engaged in 'simultaneous' closings or sheltering and obscuring strategies. We simply do not know. What I do know IS such lists are in existence with financing backed my major players. Your situation is the very first I have heard of such a list being asserted to derail a transaction.
Pleeeeeeasssssse keep us posted regarding how this progresses.
1 vote Thank Flag Link Sat Dec 22, 2012
Very strange and never heard of this happening. I hope you are able to resolve the issue.
1 vote Thank Flag Link Sat Dec 22, 2012
Why havent your lender submitt the loan to a different underwriter. you did say this is a FHA loan.
0 votes Thank Flag Link Thu Dec 27, 2012
Alejandro.... some great responses... hopefully all will work out for the best. Please keep us posted.
Kudos Annette... did not know such a list existed.
0 votes Thank Flag Link Sat Dec 22, 2012
I, never heard anything like that either...but I'll find the answer for you. Sorry about that, but
Enjoy your Christmas and give thanks to the Lord, maybe He is saving you from a bad business.
Be happy!
0 votes Thank Flag Link Sat Dec 22, 2012
Good Afternoon Mr. Paret,

As the others have stated I have not heard of this occuring with Flagstar or any other lender. It certainly would be interesting to know how one goes about being on a lender's "blacklist", yet still be an actively licensed realtor.

When is our contract due to close on this transaction? Will the seller's short sale lender allow you to obtain an extension to the contract to allow you time to seek your financing elsewhere? I would ask that to be requested. You can then search for a new lender that can hopfully move forward for you in a short period of time. I do have a loan officer that I have worked with on several FHA transactions and he is the utmost professional and would walk your loan through all the way to a quick closing.

If for some reason you are not quite comfortable with the realtor that you are using, then you will want to check with friends, family or co-workers to see who else they can reccommend. For you to have another agent place their name on your contract, yet keep your current agent in the background could place you in a position you do not wish to be in. It is always best to handle things in a forthright manner.

Please feel to contact me and I can provide you with the name of the loan officer I have in mind. You can reach me at 305-772-2521.

Lila V. Lopez, CRS, CDPE, E-pro
RE/MAX Advance Realty
0 votes Thank Flag Link Sat Dec 22, 2012
Why are you paying a BUYER's Commission? Is this a very low priced property? Normally the Seller pays the buyer's agent the commission--unless you're buying under $100k then some agents will require the buyer to also compensate the buyer's agent.
0 votes Thank Flag Link Sat Dec 22, 2012
Wow, great job Realtor Annette!

Immediately contact a credit union.. they may be able to get it closed FAST!

Also if you can come up with 5% down, get a conventional with http://www.AimLoan.com and they may be able to close in only 10 days.

Contact your Realtor and see if another Realtor in his office can assist you if his name must be removed from the contract.

All the best,
0 votes Thank Flag Link Sat Dec 22, 2012
From the Compliance tab of the HUD link proved in previous post.:

Q: What are some of the program violations that can lead to suspension and debarment?
A: Suspension and debarment are imposed for serious HUD program violations, which include bribery, false statements, embezzlement, theft and forgery. For more information, see Title 2, Code of Federal Regulations (CFR), Parts 180 and 2424.

Q: What occupations could be sanctioned by HUD?

A: Generally, all occupations relating to the area of housing. Some of these include: appraisers, home inspectors, real estate agents, brokers, loan officers, builders, developers, landlords, investors, and management agents.

This volumes of disclosures regarding 'arms length' transactions need to be taken seriously.
0 votes Thank Flag Link Sat Dec 22, 2012
The Realtor should have nothing to do with your loan application....quite honestly. I would call the lender and get a detailed explanation of exactly "why" your financing is being denied. It could possibly be that your agent has a terrible relationship with that particular lender, but I've honestly never heard of such a thing ever happening...
0 votes Thank Flag Link Sat Dec 22, 2012
no. Please ask your agent's broker to contact the lender to see if this can be explained or corrected. You can also complain to the Div. of Banking and Finance with the state of Florida. Probably won't get any action in time to help you, but may keep it from happening to anyone else.
0 votes Thank Flag Link Sat Dec 22, 2012
Nope, I've never heard of anything like that. The only thing I can think of is that your Realtor may be known to engage in unethical behavior and the bank wants to steer clear. (Not saying that it's true, just a thought). Otherwise, there is no reason for the Realtor to have any bearing on your situation.
0 votes Thank Flag Link Sat Dec 22, 2012
but in that case shouldn't I just be able to remove realtor from deal and be ok? I mean it's not the borrowers fault right?
Flag Sat Dec 22, 2012
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