Home Buying in Dallas>Question Details

Yani, Home Buyer in 33010

is it possible than even when you almost have the closing day,bank asks for barrower salary .Aren't they supposed to do that first

Asked by Yani, 33010 Fri Sep 24, 2010

My husband salary is by comission.He has been in the same company for 5 years.He make 3000 a month always or more.We did everyting insurance, appraisal,certificate of reocupancy, good credit score.The broker told us that everything was moving fast and now bank is asking for documentation related to salary by comission, because there is a new law about that.Aren't they supposed to do that initially to see if yIou qualify,before you waste your time and money doing appraisal and insurance etc.SALARY must be the first thing they look at.How this came out at the end. I am very dissapointed with the broker and the tiltle company.They apply with other bank and still wating for answers.Seller is upset because to much time and contract expired.Can i get my earnest money deposit back?. Thank you so much for your help.I really need it

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Yes, they'll check your credit/employment just before closing again to make sure they're investment is secure. As for getting earnest money back you will need to talk to the title company. They'll tell you your options.
0 votes Thank Flag Link Fri Oct 1, 2010
By the way, banks, as well as brokers, follow the identical process because they are lenders. So, moving your file to a bank as opposed to a broker won't change the fundamentals.

I am not sure why Bruce favors banks over brokers. It could be he feels the GFE's issued by banks (who hide their YSP) are somehow more respectable. The processing times for the big banks has finally pulled back from nearly 90 days to under 60 days average now.

At least brokers are processing for the insurance lenders and smaller lenders in under 10 days typically now. It's the banks who loaded up FNMA, FHLMC and got FHA guarantees on the trillions of bad loans the Federal government will have us pay for. I can't recommend banks until they have to disclose what they make on the back-end YSP just like brokers do.
0 votes Thank Flag Link Wed Sep 29, 2010
Actually the lending process is quite lengthy and complex.
The first step is that the borrower's credit is inspected.
Yes, as part of the lending process the borrower's income statements are verified. This is usually early in the processing, but not first.
Once credit, income and debts are verified, the property itself is evaluated as collateral for the loan.
If the appraisal value is acceptable, then the file may be approved by the underwriter.

The final step before funding the loan is re-verification of credit and re-verification of income (usually re-verifiction of employment). These are done by the loan processor at the borrower's lender. On occasion, the re-verification uncovers that the borrower now has made additional debt commitments that change the borrower's ability to repay or that the borrower has changed employment or sources of income have been altered, similarly making repayment of the loan difficult.

So, no, it is not unusual or unexpected for the lender to re-verify either credit, debt or income at the last possible moment. Until the funding occurs, these checks are commonplace now.

The re-verification is a lender requirement, not a title company issue. The broker should be aware of what the ultimate lender is going to do and advise you. However, the results of re-verification are not under control of the broker. And what the lender decides to do is only the lender's decision.

If the lender has decided to deny the loan based on the borrower's ability to repay and the denial is within the time period normally agreed to by the seller, then the buyer can notify the seller of the problem and either get out of the contract or request more time to resolve the problem. Similarly, if the buyer is being denied credit because of the lender's decision that the property is not adequate collateral, then the buyer can request the earnest money be returned.
0 votes Thank Flag Link Wed Sep 29, 2010
What is your agent telling you? Please tell me you have a realtor involved in your transaction.

You may want to deal directly with your bank versus a mortgage broker. The great brokers are Great, but there are a lot that are not so great. Rules are changing every day so it can be complicated. You are right it seems like they should check everything before you go shopping, but sometimes the final decision maker is looking at everything just a day or two before closing. If you can't get a loan, some of the monies may not be refundable like appraisal, inspection, option money, Earnest money may or may not be refundable. All will depend on your contract and your agent is the best to explain that to you.

Good luck...hang in there....if you need help give me a call as long as you are not under contract to another agent.

Bruce Lynn
Keller Williams Realty
214-675-6992
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Fri Sep 24, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Hi Yani, My only confusion is why are you disappointed the title company? It sounds like the lender (or the bank) is the one that is asking for documentation. If the contract has expired, it is expired. If you really want the house, you should have your agent ask for an extension. The agent may have dropped the ball if they did not realize that the loan was not fully approved, but in this market even the underwriters are asking for additional information while we are sitting at the closing table for heaven sakes.

I agree that this information should be gotten upfront. The lenders that I deal with do that, but sometimes clients prefer to use a lender that they find on their own because of the promise of a better rate or some other incentive that is offered. Some lenders find they haven't tied up all the loose ends until it is too late. It pays to use someone with a proven track record.

Depending on how your contract is written, you MIGHT be entitled to your earnest money back, but I always have to think about the seller, too. Has the seller incurred any damages? Have they already moved out? Have they actually or effectively taken their home off the market by putting into a pending status while your loan was in limbo and lost valuable marketing time? You need to review your contract or have legal counsel review your contract to answer the question about earnest money.

Good Luck, I hope you are able to work out your issues and get the home you love.
0 votes Thank Flag Link Fri Sep 24, 2010
The lending environment is very risk averse right now. Lenders are checking and rechecking credit scores, asset values and income levels on almost every deal. Hopefully the lender that your broker is approaching will be able to help you through this. If not, I would be happy to introduce you to one who can. You will need income documentation - consistent commission checks plus previous tax returns to demonstrate income. As for your earnest money, the refund would depend on the contract terms. Best advice here is to request that it be returned. If refused, you need to seek legal counsel to determine if you have a valid claim.
0 votes Thank Flag Link Fri Sep 24, 2010
Yani,

I can help you get quick financing with a "Stated Loan Program". This program is specific for buyers on a commission salary.

If you go with a tradional bank it will take you another 45 days... we can do it in 7 DAYS. Regarding the contract, just have your agent start a new one with your sellers and have the bank write you a letter to release the earnest money from the title company.

Call me asap to make an appointment !!!

SARAH MONTES
FINANCIAL ADVISOR
(214) 293-1831
0 votes Thank Flag Link Fri Sep 24, 2010
Hello Yani, try to keep the deal as long as you like the house. It's never so easy to buy a house -- there are always small complications. Now if for some reason this deal does not work out, you can start the next deal by seeking a prequalification from another lender, and let them know ahead of time about the commission salary. It really should not matter if he is working on commission as long as you can provide pay stubs and other documentation. Or, work with a lender who will approve you based on different documentation requirements. They may still recheck the file right before closing, but at least you will have the best preparation possible. Plus try to get a prequalification BEFORE you make an offer in the future -- many sellers require this step anyway.
0 votes Thank Flag Link Fri Sep 24, 2010
Yani,

Yes Scott is correct as are the other agents. Yes the lenders will ask for the income information in the beginning but they will also recheck and pull the same information right before closing. They will pull your credit right before closing also to make sure that no major changes have occurred for example you did not buy a new car. They are checking to make sure your debt to income ratio did not change.

Unfortunately, the banks are a lot more careful then they have been. Yes but they should take an average of your husbands salary if it is based on commission. It is no different then my income. I do not get paid except by commission. However not having your contract I can not comment specifically but here in NC when a buyer cannot get the financing in most cases yes they would get their earnest money back. This is something you need to check with your agent about though.

Hope this helps,
0 votes Thank Flag Link Fri Sep 24, 2010
Hi Yani, it is not unusual at all for the bank to recheck qualifications just before close in the current market. I suspect that to get as far as you did that check was done once, but what you experienced was either a recheck or a condition that you had not yet met and needed to prior to close.

I understand the seller's anxiousness and your own. I hope it works out for you.

Good luck and best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Sep 24, 2010
Yani

Unfortunately, there have been new rules for lenders since the beginning of the year that drives everyone nuts in getting mortgages approved and closed. These include a rechecking of loan qualification information right before the closing. Often this is causing closing delays. There is not much that can be done as it is now a sign of the times.
0 votes Thank Flag Link Fri Sep 24, 2010
Normally the first thing that is done is you are prequailified using what you state, the next step is teh formal appliactaion where they collect your last 2 years tax returns, last 2 paystubs and last 3 months bank statements. At this time the processor should check and verify the emplyment and income. It is not uncommon to recheck employment and credit just before closing. They should have however known where the income came from. Hopfully you had told them this up front as it is possible they missed it which it certainly seems. As far as your deposit, you need to be within teh dats on your purchase agreement for lettting them know you were denied to be able to get your deposit back.
0 votes Thank Flag Link Fri Sep 24, 2010
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