Home Buying in 92407>Question Details

cab, Renter in San Bernardino, CA

Our 1st lender (Wells,) rejected our loan due to my Husband's student loans. Current lender cannot proceed due to a Mortgage credit reject...

Asked by cab, San Bernardino, CA Fri May 3, 2013

Wells Fargo stated that they rejected us due to my Husband's loans, stating that "he could quit school tomorrow, and his loans would be due." Of course, that is completely ridiculous and unfair of them, but we moved on to a 2nd lender. No problems with them, until the end when they got a Mortgage Credit Reject on us from Wells Fargo. From what I am reading, FHA allows deferred student loans as long as they're deferred over a year (he doesn't graduate for another 2 or so years, so his loans will be due in 2 1/2 years.) We are trying to get Wells Fargo to correct this, but sadly they are dragging their feet to get it fixed. Is there anything we can do to get this corrected? We have good credit (mid 700s,) I make enough alone to pay the mortgage easily, and really the only issue given to us was the "he'll quit school tomorrow" story. Also, do we have a legal case against them if they refuse to fix this? Thank you.

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Actually, Wells Fargo is the "conduit" for more than half the loans in California. That means that if they turn you down you need to be sure that the next lender is not using Wells as a conduit.
I may be able to do the loan for you. Let me know if you would like me to try.
0 votes Thank Flag Link Tue May 7, 2013
Good Afternoon,

Fortunately, Wells Fargo is not the only lender in town. Their are several lenders out there that I am sure would love your business. If your looking to do FHA, First Mortgage has a Platinum FHA program that gives you 3% back that you can use your for closing costs or towards your down payment. Let me know if I may be of further assistance.
0 votes Thank Flag Link Mon May 6, 2013
Any subsequent lender can add, delete or view borrower mortgage credit reject information on a non-endorsed case depending on their authorization in FHA connection. If a borrower, at a later date, would apply to another FHA approved lender for a mortgage, the mortgage credit reject would be referenced on any new attempted case number pull.

Now, for the misconception. It is believed by many DE underwriters that if a case was rejected by one DE underwriter on some previous date in the recent past, that another DE underwriter can not overturn the mortgage credit denial. This is untrue.

*********FHA will allow another DE underwriter, if he or she is provided with new or updated information where the borrower is concerned that results in a significant material change in the case file, to overturn the rejection of another DE underwriter.

It is important that the approving DE underwriter, print the information contained in the mortgage credit reject screens in FHA connection and upon approval of the case, disclose on the Mortgage Credit Analysis what new information was provided and how it enabled the approving DE’s ability to approve the application. Comparative analysis between the old documentation and the new documentation is strongly encouraged.

**********Also keep in mind that any previously rejected loan that are approved by another lender after rejection will undergo a very detailed underwriting review by HUD during any post closing technical review so be sure to address all of the reasons that from an underwriting standpoint that the case is now approveable under FHA guidelines. If the explanations make sense, then the case should be insured by HUD.

I hope this helps you understand what you are dealing with.

Have a great weekend.

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit
Ex-Mortgage Broker of more than 10 years
0 votes Thank Flag Link Sat May 4, 2013
Please give me call so I can explain how we can overcome a MCR. I do this all the time as I am a backup lender for several Builders.

Best of Luck!
Web Reference: http://www.AFN-Loans.com
0 votes Thank Flag Link Sat May 4, 2013

I work with a great mortgage broker that has came through on some really tough situations. Contact me if you would like his information.
0 votes Thank Flag Link Fri May 3, 2013
Here is another fine example of Wells Fargo at their finest!

If you are using another "Bank of the universe" type institution, you will most likely not get through this.

What you need is a direct lender with some underwriting flexibility and if that requires switching lenders again, then so be it. You need to get your home.

First Mortgage, Wholesale Capitol, Broadview, First Lending Solutions & Provident all have the ability to work with special circumstances.

Jory Blake
Web Reference: http://www.JoryBlake.com
0 votes Thank Flag Link Fri May 3, 2013
We currently have Catalyst, so I have NO idea if they have the flexibly or not, but I am guessing they don't since they are asking Wells to fix it. And, for the record, I tried to get out of the Wells Fargo loan lonnnng before they screwed us! No one would listen to me! Ha ha ha :)
Flag Fri May 3, 2013
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