Home Buying in Brea>Question Details

kperez, Home Buyer in Brea, CA

Underwriter denies loan days before closing what can i do??????????????????????????????/

Asked by kperez, Brea, CA Tue May 1, 2012

I am in the midst of my first home purchase, was pre-approved through our lender and now we are already late and had a extension for our close date and my lo is telling me that my loan will not be approved by the underwriter. They are stating that because my credit report has a few authorized users trade lines on it my FICO score is not correct and can't be used. So now they want to move me into a higher interest rate loan and have the option to try and refi in a few months after I clear the authorized users of my report. They are telling me this days before I am suppossed to close after gettin an extension.Should i settle for the higher loan or start all over with a new lender. I can't believe they waited this long into the process to tell me they wont approve, is there anything i can do?

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I read this entire thread and I gathered the following:

1) Most people don't understand how mortgage fraud is facilitated (more than likely kperez was unaware the credit score they had wasn't accurate) or what to look for.

2) Everyone is making assumptions about the lender with little factual basis to go on

3) This second loan may not be as bad as it sounds.

1) John sufficiently covered this with his link to the Fannie Mae article on credit cleaning/mortgage fraud, if you don't understand why this is an issue for lenders and why it invalidates one's credit score, read this article and ask one of us for clarification if you're trying to avoid getting stung the same way. (search this thread for "fannie", go to that link).

2) It seems to me that if this was discovered so late in the process, the lender the borrower was using does upfront processing and then underwrites the file when they have a full file. Most brokers actually submit files like this and many bankers do as well (I prefer this method to be honest because it ensures quick underwrites as only full files are submitted reducing the garbage submissions that clog up underwriting I see at other companies). The processor and loan officer aren't underwriters and while it's unfortunate that neither caught/knew to look for the authorized user issue, we can hardly say they didn't do their job.

3) The second loan they talked about may be a portfolio loan that they don't have to sell to a secondary investor (Fannie Mae/Freddie Mac/Ginnie Mae are the primary examples) which would explain why the rate was higher, especially if it's a higher risk loan (thin tradelines most places would be considered higher risk). I'm not advocating taking this approach but I'm also not saying it's a bad option especially if the non-authorized user accounts are minimal and may not produce a credit score at all.

The rapid rescore not being allowed is quite common actually amongst lenders (bankers/brokers/banks). If a file defaulted and only qualified because of a rapid rescore the investor could use that as leverage to make the lender buy back the loan. If your company doesn't prohibit the use of rapid rescores for qualifying purposes, don't take it for granted or abuse it or you may one day be on the other side of that coin.

kperez, if you can get it closed with your new lender, great, if not, you know what you'll need to do in the next couple of months to ensure you won't have any issues the next time around.

P.S. I see way too much self promotion in this thread, if I could give someone negative votes, I would. Go pay for advertising, you know who you are.
Web Reference: http://RobWeber.com
6 votes Thank Flag Link Wed May 2, 2012
Amen, my fellow loan officer!
I have not even gotten to the rest of the thread and know the culprits of self promotion.
Very good information that I will share at our production meeting tomorrow!
Flag Tue Nov 20, 2012
Amanda,

I'm very sorry to hear about your nightmare......FYI, there are 6 things to remember NOT to do when applying for a mortgage. They are:

1. Don't deposit large amounts of cash in your banking account

2. No large purchases, car, boat, furniture, etc.

3. Don't co-sign a loan

4. Don't change bank accounts

5. Don't apply for new credit cards

6. Don't close any credit accounts

Number 6 did you in......this is pretty much standard procedure for lenders today. Unfortunate as it is, one would have to believe that you should have been made aware of this by your lending agent.

I know this is after the fact and no help at this time but something others may learn from.

Best wishes.

Bill
3 votes Thank Flag Link Sun May 13, 2012
kperez,

If your current loan is a FHA loan and you ask them to deny it now so you can move to a different lender, you may find problems at the new lender because FHA connection stores the denial reasons often times (depends on the mortgage company's policy or if they feel like making the note) when a FHA file a previous lender was working on, denies it. If they were to do this, the new lender, upon receiving your FHA case # will see the reason for the denial, you'll have the same issue with the new lender unless they don't care about the authorized user items (I can't see this being the case though). You could ask if they make a note in FHA connection but often times that'll just alert them that they should so it's a catch-22. It may actually be better to withdraw your file and transfer to a new lender but if you decided not to move forward or could not, you'd have to have the later lender issue a denial for your earnest money, assuming it was still refundable at that point in time.

Best of luck to you.
Web Reference: http://RobWeber.com
2 votes Thank Flag Link Fri May 4, 2012
Unfortunately many times lenders are slow to respond since they look at closing dates and process not according to first come, but to closest closing date. I try to work with lenders who are more involved, have excellent communication, and get their ducks lined up early. One thing hard to manage, however, is that lenders have to spend money to check credit reports, tax validations, etc. so they hold back until the appraisal is completed and the house appraisers. Given today's market that makes sense.

Neither here nor there, I say ask for an extension and shop another lender. Hopefully your Realtor has better choices. You should be able to transfer the appraisal since you paid for it.

Good luck,
Cathy Bureau
Green Home Realty
1 vote Thank Flag Link Mon May 7, 2012
kperez,

Maybe you should email me or call my cell, I can keep helping this way but it'll take days to get answers that may otherwise be done in a few minutes. I (or anyone else) don't know enough about your loan details to assist you further, without dragging this out and you're on a short leash as far as time goes.

As far as releasing your contingency, your earnest money is already gone, you just have to decide if you're closing on the home or not, if you must (and want to) close before you can get a new lender or have a couple review your package then do what you must, otherwise see what happens this weekend.

Let me know if you have specific questions.
Web Reference: http://RobWeber.com
1 vote Thank Flag Link Fri May 4, 2012
Hello, I love this question because in my years of real estate this has happened to a few of my buyers, a little different reason but similar circumstance. I would definitely say that you should take your paperwork to two lenders to see what they say about it and let them know you are already in contract.

You want to make sure you are making the best decision before you take on a higher interest rate which means higher payments. Depending on the house you're buying who knows when you'll be able to refinance or if you'll qualify.

Get more advice before you make the final decision. But if you choose to leave this lender make sure you get a denial loan letter in writing with the correct date, just in case your lawyer has to get back your down payment if this deal doesn't work out......... but hopefully it will.

Good luck!!!
Web Reference: http://www.RhondaHolt.com
1 vote Thank Flag Link Thu May 3, 2012
Will a denial letter give me a chance to recoup my down payment our at least get another full 30-45 days to close with a new lender?
Flag Fri May 4, 2012
Thanks John, I didn't see that; I also didn't see that USBank is the originator. Proof of my theorem that the WORST place to go for a mortgage is one of the BIG BANKS.

Local Mortgage Bankers are where it's at. I'm just sayin'...


Trevor Curran
NMLS #40140
1 vote Thank Flag Link Wed May 2, 2012
Ironically I just took a loan from a small broker who jerked my client around for a week and a half after my borrower requested the case # transfer. Tthe grass is always greener on the other side. :)
Flag Tue May 8, 2012
At this point in the transaction you really only have a couple of options. One is to try and have your agent get you another extension and then investigate other lenders. The second is to terminate your contract and likely lose your earnest money deposit. The third is to accept their terms, close and then go out and find another lender and once you've refinanced, be certain to let your loan office know that they and the bank he works for have made a lifelong enemy and that they can now count on your going out of your way to bad mouth them and the bank they work for to everyone you know.

The truth is you may well have issues and the lender may well be telling you the truth, however this doesn't absolve them from their completely inexcusable and unprofessional behavior. You should have been told this weeks before closing, If you were truly preapproved (as opposed to prequalified which means nothing) you should have known about the issue before you even made your offer.

The Lender did a lousy job and should not be excused. They had your contract at least 6 weeks before the closing was scheduled if not longer and had they bothered to do their job properly you would have been notified of the problem well in advance.
1 vote Thank Flag Link Wed May 2, 2012
Thanks Larry, looks like i have to take option 3, US Bank has made a enemy for life!
Flag Wed May 2, 2012
Good morning kperez,

If you have sufficient trades then your FICO should be fine. Taking the time to consult with another Mortgage Banker would probably involve one afternoon. I get lots of "911" calls of this sort in my market and I typically render a prequalification decision (with Underwriter review because we're Direct Lenders) in less than 2 hours (including 1 hour to meet with the client).

If you do that, at least you'll have a sensible answer to the question of whether you're qualified, or not.

@Deborah: Yes, I know CA is an escrow state; my remark about attorneys was a New Yorker's snarky way of saying you guys should do things our way. This is a shining example of the reasons why attorneys should be involved in the real estate purchase transaction. And as to throwing the other mortgage person under the bus, I wouldn't have called him an IDIOT if he'd only had the problem with the authorized accounts (I wouldn't have been kind, but a bit more forgiving). The L.O. qualifies as an IDIOT because of the turnaround to a higher rate loan. This is an L.O. who hasn't taken the time to study Underwriting guideline fundamentals nor has he taken the time to properly prequalify kperez' situation. In the many "911" calls I get here in New York, I see the same thing all too often. When I interview the client about their interaction with the previous L.O. sure enough, the previous L.O. didn't pay attention to details and didn't understand basic Underwriting standards.

Kperez: I wish you the best of luck. Get in front of an experienced Mortgage Banker to review your prequalifications. If she/he says you're good to go,switch your application and get your new Mortgage Banker on the phone with the Realtors to buy you the time you need for approval and closing. You'll get it.

Trevor Curran
NMLS #40140
1 vote Thank Flag Link Wed May 2, 2012
Sorry for the turmoil. Personally, I would want to know more about your situation before committing to an answer. Given the lack of stability in the finance world (changes, changes and more changes), I would not be at all comfortable with a mortgage person telling anyone to "take this now and we will refinance you later". There are just too many things outside of my control to ever guarantee a consumer anything about the future in finance.

@Trevor, as I stated, I don't think the question and thread in crystal clear enough to throw another mortgage person under a bus. However, you might want to start with knowing California is an escrow state, not an attorney state....so there are no attorney's involved in the transaction.

Important question is "Do you have your own agent?" If so, I would not assume you have to take the deal or that your depostit is absolutely in peril. An in house lender can close pretty quickly and I do recommend getting a second or third lender's opinion. Wishing you the best.
1 vote Thank Flag Link Tue May 1, 2012
horrible answer!
Flag Tue Apr 30, 2013
Too bad. Lenders do this all the time.

Have you removed your loan contingency?

You have the option of backing out, hopefully you didnt remove the loan contingency,

Or proposing the seller carry some financing. Depending on their current loan balance, you may be able to close without the seller taking any hit, if they do not carry much equity. 2 questions you want answered for this to work. 1. whats the sellers loan balance. 2. how much down payment do you have

There are many ways to put deals together between buyer and seller, utilizing the existing home loan on the property, without qualifying for a new conventional loan. I'm happy to entertain any questions. Best,
0 votes Thank Flag Link Tue Nov 18, 2014
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0 votes Thank Flag Link Wed Aug 20, 2014
Do you need a loan? we offer loan at 2rate if yes contact us on this
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0 votes Thank Flag Link Fri Aug 15, 2014
Do you need a loan? we offer loan at 2rate if yes contact us on this
email for more details moneylaundering48@gmail.com

amount:
country:
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phone number:
name:
0 votes Thank Flag Link Fri Aug 15, 2014
why do mortgage companys send your paperwork to a underwriter before I apply for a house
0 votes Thank Flag Link Fri Aug 8, 2014
i needed to get a good car since my place of work is far from where i leave , i told my husband about my plans to get a loan so that i can get a good car of my choice but my husband instructed and advise that i shouldn't apply for a loan online because almost all loan lenders online are scammers so i had to wait for an extra 2 months but the stress was so much on me because this time around i was always getting late to work and my job was almost on the line and all effort to get a loan from my bank inst working through because i have a bad credit so with all this issues i had to get my mind crossed by applying for a loan online although i wont say that i was so smart for not been scammed but i strongly believe that it was the lords doing for directing me to this loan company owned by a woman like me . the name of the loan company is QUEENETH STARK LOAN COMPANY . i got my loan easily and quick contrary to what i was earlier told by my husband . I am now a proud owner of an SUV 2014 model car by virtue of the QUEENETH STARK LOAN COMPANY . i dont really know if you are seriously in need too but just incase you can reach them via mrsqueenethstarkloanagency@admin.in.th or mrsstarkloans@aol.com and also you can reach me on my personal email address which is leahrays12345@gmail.com

LEAH RAYS
0 votes Thank Flag Link Fri Jul 25, 2014
I am a first time buyer and days from closing. The lender is telling me that I have to pay a revolving credit I have for 1,700 to close escrow. I do not have any money and I told them to let it fall out of escrow but they refuse. They are now telling me that the sellers agent can sue me for his commission if i don't go through with it.
HC
0 votes Thank Flag Link Thu May 15, 2014
@Rob Weber - The question was asked OVER 1 year ago
0 votes Thank Flag Link Sun May 26, 2013
Well we were pre approved and we have everything done right .found a house everything was done inspection, appraisal and two weeks before closing they tell us that hud or fha change the guild line 10 days after we were pre approve .and now we don't qualify for the loan .and we sold are place that we live in now we don't have a place to live.
0 votes Thank Flag Link Sat May 25, 2013
all home owners need to be put in jail for lies and the money they stol from i can not get home owner at all the unders keep coming up with new lies i live a month check and they want me to pay down 269.99 and then 210 a month i do not get that much at all they say we can not cover you because of the new roof or we can not cover because you don't centel air and they say we can not cover you because you have not had any home owners in 6 months i have no claims at all it is not the people that they do cover that are the crooks it is the home owners under writer they need to be in jail for robbing us
0 votes Thank Flag Link Tue Apr 30, 2013
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?

Now we have to ask for an extension from Wells Fargo to extend the closing date on the short sale which who knows will even get approved. Has anyone ever heard of a situation like this? Is this even legal? Now we may lose out on a house we waited a year to get a short sale approved on. Any advice will be greatly appreciated!
0 votes Thank Flag Link Sat Dec 22, 2012
i am in the process of getting a loan i have turned in all my paper work to the mortage lady she turnded it in to the underwritter does that look good
0 votes Thank Flag Link Mon Oct 1, 2012
If there was a problem with your credit report this should have been disclosed to you when your credit was pulled by the lender. Unless your credit was repulled fter a certain time, there is no reason for this to come up so late in the transaction. Now you are forced to take a higher interest rate or lose your home.
I am sorry to hear this and I hope you cn resolve this. If I can be of assistance please feel free to contact me, my team and I are very knowledgable with these type of situations. Thank you.
0 votes Thank Flag Link Sat Sep 15, 2012
Unfortunately the lender has the right to not approve your loan in the end if you've received no loan commitments. A loan commitment may be deemed a legal contract that you can enforce and is sometimes given to the developer borrower on construction projects. I don't think they will give out loan commitments on a residential loan. Not sure what your issue is on the credit report. If you wish, I can help you review your credit report to see if I can fix it., if nothing else, to make sure you won't run into a problem on your next purchase.
0 votes Thank Flag Link Sat Aug 11, 2012
Hey Kperez,

I am sorry to hear your having such trouble to get your loan approved. I work for a Direct Lender and we are more flexible then a lot of other lenders out there not to mention we have competitive rates. I would like to help you out so that you can get a good loan and get into the home you want. Please give me a call so we can speak further about this.

Jovan Simon
In House Lender
714-619-3172
jsimon@inhouselender.com
http://www.inhouselender.com

We have an A+ with the Better Business Bureau.
0 votes Thank Flag Link Sat Aug 4, 2012
Unfortunately you were working with a loan company that didn't do adequate research into your credit history in the beginning. You say your are being denied, but then you say you are being offered a higher rate. Those cannot go together. If they are offering you a higher rate, then they are not denying your loan. Basically, you have no choice if you want the home. It sounds like you are buying a bank repo or short sale and unless you meet their demand to close you will lose your deposit and be left without a home.

I hope you bought the home. When it comes time to refinance, call me. I have a referral for a great lender here in OC. Good luck.
-az
0 votes Thank Flag Link Mon May 21, 2012
@Trevor, LOL! Attorney's don't make for better mortgage loans, my friend!!! Escrow states do every bit as good with closing loans. When I said "kinky" I was referring to things like the requirements for CEM (isn't that the title?) refinances....and the costs involved with obtaining mortgage financing...easily one of the top three more expensive states to finance real estate.

Not sure what local financing is like now (I was working Nationwide until 2004), but "back in the day" I was routinely seeing comparative GFE's at 2 to 4 points for the same pricing I was doing for 1 point. I am all about "local" financing in today's convoluted financing process (discount/online lending right now is a great way to lose a house, IMHO); however, that kind of spread is just highway robbery (again, just my humble opin).
0 votes Thank Flag Link Mon May 14, 2012
Deborah,

Love it! Incredibly well-said. I like the "Captain" analogy. And, I have to agree with you about folks wanting the shortest route to prequalification. I find potential clients quickly chill to my insistence on a full document review and face to face meeting. The ones who see it through are the ones with success stories on their home purchases.

I guess I mis-spoke about NY being the "ONLY" state to require attorneys; but only 7-9 states is kinda sad when you think about it. Part of the reason we're in this mess to begin with, I think.

And, yes, we have some rather stringent requirements on closing mortgage loans here in New York State; but those requirements protect borrowers tremendously, and I'm glad for that.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Mon May 14, 2012
kperez,

I hope your situation has been resolved by now....and hope you will post to let us all know.

Not surprisingly, I have heard comments like @Augtust and @Amanda before. Ironically, the mortgage industry is getting more and more complicated and more nuanced than ever.

First, @August: The biggest issue I see (in relation to your comment) is that there are far too many loan officers (in my world, I differenitate between a "loan officer" (order taker) and a "mortgage professional" (a consultant/educator/advocator for the borrower)) who issue "preapprovals" that are nothing more than a "prequal". The two words are truly worlds apart in the mortgage industry. Many "lolan officers" issue preapproval letters on the fly, without validating any of the information provided by the borrower. And, of course, the borrower may, or may not, know how the information will affect the qualification process.

I do find; however, that many first time home buyers are more inclined to want to listen to the loan officer who glosses over the details and gets them out looking at houses with as little fan fare as possible. The problem is that the issues that should have been resolved at the beginning of the process tend to come to light at the end of the process. In that case, then I would have to agree with you that it is "just cruel, mean and unfair". Personally, I don't want any client out looking for their dream home until we are 100% certain they can have what they are longing for.

@Amanda, Without spending a great deal of time explaining and pontificating about the issues of credit scoring, let me just say that any "mortgage professional" (see previous statement) KNOWS that paying out old collections or debts WILL lower credit scores. The rule of thumb is NEVER, NEVER, NEVER instruct a borrower to pay off old collections prior to the close of the loan. Let the underwriter stipulate that the collection has to be paid at the closing...the requirements for the loan are satisfied and the fact that paying the collection will result in a lower score doesn't matter because the borrower has already moved into their home.

For all first time home buyers: The home buying process is a TEAM event....and the mortgage consultant (like it or not) is really the Captain of the Team. If he/she does not have the leadership skills, or the experience, to manage the plays to "score a touchdown" it is likely the "Team" is not going to win the SuperBowl. That said, a Captain does not always tells the Team everything they want to hear. Nonetheless, the Team has to rely on the experience and motivation of the Captain to get the finish line. Sorry for the metaphor...but it really does apply.

True mortgage professionals are advocates for consumers and partners with real estate professionals....and there is a lot of evidence in the advice threads here on Trulia. We truly are horrified when we see/hear the horror stories such as kperez has brought forth. It does take nuance, experience and a Team to close a loan. Borrowers would do well to look for leaders, more than shop for the cheapest rate. Ironically, there is often a very small savings for working with discount brokerage or online lender who is little equipped to finesse a first time home buyer through the mortgage process.

@Trevor: Sorry, but New York is not the only attorney state. In fact, there are somewhere around 7-9 (Florida, Virginia, Massachusetts, Illinois to name a few), Having closing loans in all fifty states, I will tell you New York has some the "kinkiest" requirements in the mortgage industry, however. LOL!
0 votes Thank Flag Link Mon May 14, 2012
To August and Amanda and kperez,

I'm so sorry you had such terrible experiences trying to buy your homes. The shame of it is the mortgage people and banks you entrusted with your dreams were not worth that trust.

The sooner that folks begin using Local Mortgage Bankers again, the fewer nightmare stories like this we'll hear. The regular banks don't give a hoot about homebuyers' dreams; loan applicants are just numbers to these monolithic corporations. Further, the sales people are NOT Licensed, only Registered. The poor quality of their work as demonstrated through the stories of these families' plight is a clear definition of the difference between a Licensed Mortgage Loan Originator and a registered one.

Trevor Curran
PROUD Local Mortgage Banker in New York State!
Licensed Mortgage Loan Originator: NMLS #40140
0 votes Thank Flag Link Mon May 14, 2012
Isn't this whole PREAPPROVAL thing illegal? Because homebuyers are told to "Find" a house they want and start building their dreams in it once they know they can afford it based on "preapproved" amount they were given, and spend money on processing and everything then all of a sudden they're told they cant have it? It's like having a little kid taste a candy and then tell them they can't have it. That is just cruel, mean and unfair to homebuyers!
0 votes Thank Flag Link Sun May 13, 2012
Thank you Bill,
I am trying my best to help make other people aware of what happened to me, because I think they took for granted the fact that my husband and I were new home buyers and are new to the process. I think they should have worked with us especially since they listed that out in their contract all of the debts by name that had to be paid first before we could get the loan. And since I had my receipts at the end and told them why my credit score lowered, I believe they owed me that much. But instead I got the door shut in my face. I did turn right around and ask to speak to the manager above the manager, because it is my belief that a mortgage company should know the consequences of tampering with collection accounts if they are going to use that to either approve or deny your loan. The funny thing was the manager I was talking to on the phone tried everything in his power to keep from giving me his bosses name.. even going so far as to try to transfer me to another department after being on hold for 25 minutes, but finally I drug it out of him piece by piece. Something dosnt sound right to me......
0 votes Thank Flag Link Sun May 13, 2012
Wow I thought I was the only one, only our situation is a little worse. My husband and I were pre-approved for 179,000 and found a house for 149,000. We went through the whole loan process, inspections, earnest fees, the whole nine yards. We were approved with conditions and part of those conditions were for us to pay off any debts that were in collection. All of those debts were about 3 to 4 years old, but my husband and I went to work paying off any debt we had in collection. We were scheduled to close May 9th, I was told the last step to our loan was stamping the title and signing it.
I decided to call and check on the status of the loan on the 7th and was informed that USAA had run my husband and my credit again without our knowledge or approval and when they did they discovered my credit score for Equifax had dropped. Because of that our loan was kicked out of refer approved status to refer eligible status and needed to go back into underwriting. I called Equifax to see if anything had changed, any debts added etc. and was told nothing has changed. I was told however that because I paid off all the old debt in collections it took my score down because of the age of the accounts and it being brought into recent history.
I provided every receipt to the manager of USAA showing the debts had been paid off and told them the reason my score went down and guess what...... I was informed on May 10th, a day AFTER our closing date that our loan was rejected. They told me it was because of our recent credit scores..... the scores that dropped, because of the debts that THEY told us to pay off to get the loan. I have written to the attorney general, consumer reports, I wrote to a local news station to run a trouble shooting report on their company and my husband has contacted IAVA. Would anyone else like to join us in a battle against USAA?
0 votes Thank Flag Link Sun May 13, 2012
it wouldn't let me finish...

to be done. I am a disabled Veteran who just got a new job and trying to stake a claim in this tough economy. If I am unable to afford this property I should have never been pre-approved and never left to come this far and spend so this large amount of money to be denied. USAA should pay for all of my losses. What are the thoughts out there???
Flag Thu Oct 18, 2012
I would love some more information on your story. I am moving into this same territory with USAA I was pre-approved, and then conditionally approved, however, I just received a phone call stating that they have looked at things again and the information I originally gave them about he property of interest was not taken into consideration and the taxes are about 1500 more a year than anticipated so they believe the loan will not pass. I have already put 5000 down for earnest money and paid about 1000 for an inspection for including water, air, and pest as required for a VA loan. This is jacked up! They suggested I refinanace my vehicle or pay it off... this should have been looked at immediately as I was upfront with my finances and debt; in addition, the car loan is my only debt. If this does not go down and I the total $5,000 earnest money or even some of it, the $350 put down for USAA to PROCESS (or the lack there of) the loan, and roughly 1,000 for inspection, something needs
Flag Thu Oct 18, 2012
Kperez was still luckier than me because he was given a choice and i wasnt.
They totally just shut their doors on me.
0 votes Thank Flag Link Wed May 9, 2012
This just happened to me too. After I submitted all my requirements(Paychecks, w2's,etc) I received the Wells Fargo "Priority Buyer" preapproved letter of 400K. They congratulated me and told me to start home shopping.
I found a house worth 365K. My kids are all excited and already choosing furnitures and colors of their room. I got the purchase contract, went to escrow and ready to close then loan officer all of a sudden just emailed me that my loan is denied due to some kinks on my credit history. All I thought the credit history review was way over due to the preapproval I received. But prior to declining me this guy asked for a downpayment and I told him this is a VA Loan and my mortgage officer agreed to a zero down. He told me he will contact again the mortgage officer and he never talked to me again after that until I received his email declining me. To me this practice is unethical and cruel, telling someone to find a property that you like and in the end tells you that you cant have it!

And also I spent almost close to $2000 for earnest money, inspections, etc. I would bet none of you guys would give me $2000 for nothing.

If there's any lawyer here I would love to sign a class action lawsuit against these guys!
0 votes Thank Flag Link Wed May 9, 2012
Isaac,

I agree wholeheartedly with you; the problem here is this deal is in California. They don't use attorneys in California. Only we New Yorkers are crazy enough to insist a Seller and a Purchaser are represented by counsel. Madness, I know.

Further, this loan was originated by one of the BIG BANKS (aka "Evil Empire"); these players skirt the Federal regulations day in and day out. They make "Change of Circumstance" look like it only applies to lil' ol' Local Mortgage Bankers.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Tue May 8, 2012
Sorry to hear that but looks like a scam to me. If you have a loan commitment and the rate was disclosed to you the have no reason to change it. The had your credit report from day one, if the had a problem the should of told you in a earlier stage so you can make your decision. I would suggest that you ask your attorney discuss this issue with the seller attorney and hopefully get you another extension so you can apply with another lender and get the rate that was promised to you.

Best of luck!
0 votes Thank Flag Link Tue May 8, 2012
The fact that they're even letting him try to move into another product instead of outright denying him suggests they still have his best interests in mind. At my company, we don't have portfolio products a borrower could move into if the underwriter deemed their credit report unusable like what was done here. I guess it depends on how you look at it. Lenders all get paid the same way now so there's no financial incentive to move the borrower into a new product and no bank is stupid enough to knowingly discriminate in this market.
Flag Tue May 8, 2012
I had this happen on a recent transaction. I was representing the buyers. They met the debt to income guidlines and the house appraisal was completed. My clients had their apartment packed and were ready to move. The underwriter denied the loan based on debt to income ratio was not good enough. My clients had to jump through hoops to satisfy the underwriter. The seller granted us a one week extension. Turns out the one week extension worked and we closed. it was very traumatic for my clients.
0 votes Thank Flag Link Tue May 8, 2012
Ask your Realtor for an extension to the purchase contract and get a referral from him for a new lender.
0 votes Thank Flag Link Mon May 7, 2012
I just read that you are buying an REO. Are you going through that particular bank? If not, then you may want to consider using their bank. That will most likely give you the extra time you need. Good luck!
0 votes Thank Flag Link Sun May 6, 2012
Are these authorized users on your accounts, or are you an authorized user on someone elses account? Either way all it takes is a phone call to the creditor to get taken off of the account. I've never heard of a FICO not being correct. When you got the first extension, that should have been some indication something was up. You have a few options. 1. Just go with the higher rate (keep in mind refinancing in a few months would cost you) or 2.Try and go through a different lender (you would have to get ok from seller). Maybe the listing agent has a good lender they can refer you to.
0 votes Thank Flag Link Sun May 6, 2012
Believe me, I know how much this hurts. It is however not uncommon. I have had this happen several times in the last 20 years. I've had buyers at the closing table ready to sign with moving vans in the parking lot loaded with everything they own and the lender appears and says "sorry we can't fund the loan"

Its almost as though some lenders use this trick to get you into a higher rate. I have seen this a lot, especially with Buyers shopping "online lenders" for lower rates - rather than going into a local lending institution in the town you live in. Whatever your circumstances are, I feel your pain. Sounds like you only have one choice. Perhaps you should seek legal counsel.

I wish you the best.

Trish Chandler
Michael Saunders & Company
941.306.9533
email: trish@trishchandler.com
0 votes Thank Flag Link Sun May 6, 2012
Man, that bites. I am so sorry. As an agent, I have seen this happen and there is really not much that can be done. That is why is only use the absolute best mortgage people out there, especially ones that have an underwritting background. Most poeple do not realize that just because a lender says it will fly, means very little, unless they truly understand the process. I know I cant be much help in this situation and ultimately the decision is up to you and how bad you want the house.
0 votes Thank Flag Link Sat May 5, 2012
I hope you were not advised to removed ALL of your contingencies ! If so, you may not only lose your EMD but also be on the hook for up to 3% of the purchase price.....
0 votes Thank Flag Link Fri May 4, 2012
How can i find out: what this says Freddie Mac guidelines chapter 37.5(c)?
0 votes Thank Flag Link Fri May 4, 2012
My agent has given me the impression that we are not able to back out of the deal w/o losing our earnest money. We signed the release of contingicies and they will give two more weeks before they issue a order to perform. Making it tough to find a new lender that can close in time, that is the impression I am getting....
0 votes Thank Flag Link Fri May 4, 2012
Dear kperez,

Rhonda is right: go to the other Lender(s) before you agree to the higher rate. While we consumers may feel empowered that we're going to trash-talk a big corporation, the fact is our loudly bashing a big corporation has zero effect on said big corporation. You're a number, not a person. They really don't care about you today, tomorrow, or about what you have to say.

Try to get the time to switch to a Lender who will make this happen at terms that are more acceptable to you.

Good luck!
Trevor Curran
NMLS #40140
0 votes Thank Flag Link Fri May 4, 2012
@Rob thanks I'm taking a crash course on the finer points of loans and with the time crunch my agent is telling me (seller will give 2 more weeks before order to perform) we plan on closing and then refinancing as soon as we clean off the authorized users on our credit report (already called to be taken off each account, now we just need to make sure the reporting agencies know that). Issue I have now is why they didn't tell me this sooner when they did the credit report at the beginning of everything. US Bank will be getting so much bad publicity from me and I will be sure that they are aware that I am not a happy cutomer.
0 votes Thank Flag Link Wed May 2, 2012
Keep your head up, you're almost in the end zone!
Flag Wed May 2, 2012
I don't do the "Rapid Rescore" thing, but considering it IS an option with regards to removing the Authorized User Accounts, why didn't your Loan Officer present this as an option? More than a few Loan Originators have responded to you here on Trulia that this is what they recommend.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Wed May 2, 2012
I would try to have yourself removed as the authorized user and do a Rapid Rescore. Please call if you need assistance.

Rob,
858-922-7899
0 votes Thank Flag Link Wed May 2, 2012
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