I received a pre-approval letter for a home loan (2nd home for retirement) would be the only mortgage. All disclosed, now declining... is this legal?

Asked by Robertson.s, Clearwater, FL Sun Oct 20, 2013

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5
J, Agent, Greensboro, NC
Mon Oct 21, 2013
As I read what you wrote, my interpretation is about a bank letter. A pre-approved/pre-qualified bank letter is interchangable these days and both mean your loan "request" will need to go through a lengthy bank underwriting process before you are "officially" approved for funding. At any time during the underwriting process a bank can request additional docs and/or decline a request.

The majority of bank loan requests accompanied by "bank letters" are just requests. Until a bank's underwriting department completes its financial due diligence most sellers that received bank letters from a buyer know the deal could fall through at any time. Thanks for the post and best wishes to you.
0 votes
Leonard Poll…, Mortgage Broker Or Lender, Naperville, IL
Mon Oct 21, 2013
My name is Leonard Pollard, and I am the person that is going to help you accomplish your mortgage needs. You just recently made a mortgage inquiry and that is why I am writing to you now. When dealing with potential borrowers over the internet, I typically introduce myself first via email. I will try to call you within 24 hours unless you prefer a different time or place for me to contact you.

I must tell you that I do not work with all potential borrowers just as they do not work with me. I am straight forward and to the point. In addition to that, I treat every borrower with the same level of service that I expect for myself when making important financial decisions. I use my 13 years of experience in the mortgage industry to provide the best products available for my borrowers and their specific needs.

I would like the opportunity to have a brief conversation with you to discuss your expectations. If you feel that you would like to talk sooner, do not hesitate to call or reply at any time. I have attached an application for your convenience as well.

Our mission, at Peoples Home Equity, Inc., is to secure the best mortgage available for our clients. We will work diligently to find you the best possible terms, helping you achieve your financial goals in a friendly and professional manner. Our clients truly do come first and will be treated with the utmost respect and forthrightness. You will notice the difference from the initial consultation.

Best Regards,

lpollard@peopleshomeequity.com
0 votes
Christopher…, Agent, Bloomington, MN
Mon Oct 21, 2013
First, it is legal. Second, Conventional financing after a foreclosure is 7 years. Maybe I am reading you explanation incorrect, but it seems like you have a foreclosure on your record? OK go FHA then and accept the fact you can't refinance until you are 7 years out of the foreclosure rule. If your primary home is FHA financing things get sticky, but you can always refinancing that home into conventional.

Just sounds to me like your loan officer did not do their homework. If you would like a referral to a very good one I use just contact me and you will never have to deal with this problem again. Also, I have lived in the small zip code of 55127 for over 10 years now. I would be more than happy to help you along this journey. It sounds like you have some frustration going on now, but if you have the right team helping you it will actually be quite fun.

Just get in contact with me,

Christopher Block
Realtor North/NE Suburbs
651-307-7663
chris.block@imetroproperty.com
0 votes
Bill Eckler, Agent, Venice, FL
Sun Oct 20, 2013
There is a multitude of steps to obtaining a loan before final approval and funding. The bottom line here is the lender can "pull the plug" at any time they desire and for whatever reason the deem fit.

Were you given a reason for this rejection? This too can take on many different faces and have nothing to do with your financial worthiness. It could be because of the home, condition of the home, characteristics or type of construction, etc. etc.

I would ask for their logic before determining whether or not to try again with another lender. Because you were turned down by one lender doesn't necessarily mean you should throw in the towel.

Stick with it!

Bill
0 votes
I made it very clear I was looking for a 20% down conventional mortgage and explained all my credit history in detail. I had bought a home with another person in 2007. My co-owner could not meet there obligation and had to file for bankruptcy and I couldn't cover the entire mortgage. The house was foreclosed on in late 2008. This was all disclosed to the lender before the pre-approval letter was given. I worked with their credit specialist to send a letter to clean up and error caused by the foreclosure. It was cleared and my credit score increased, but then she said my loan was "Flagged" because of the foreclosure. She said it had to do with the type of foreclosure. I would think that would be a question asked before a Pre-Approval letter is given. Any advice on whether I have any recourse?
Flag Sun Oct 20, 2013
Kim Eisen, Agent, Twin Cities, MN
Sun Oct 20, 2013
Pre-Approval is just that. A pre-approval with conditions that must be met and underwriter approval. Is it legal, probably, but not very professional on the loan company's side. Or, maybe something showed up that was unknown at the time of the pre-approval. Bummer that after looking at your file more in-depth, they decided not to do the loan. It may just be the institution you went to and their underwriting guidelines. First, find out their reason for the decline. Then call other banks / institutions and speak with an experienced loan officer. Let them know up front what the other banks challenge was with your loan. For them, it may be no problem at all.

I've done this three times in the last few months for clients, calling around to see if 'others' can do something differently based on the information we had. We got all three through with another bank.

With a little persistence and hope, you may be well on your way to getting that 2nd home.

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0 votes
I made it very clear I was looking for a 20% down conventional mortgage and explained all my credit history in detail. I had bought a home with another person in 2007. My co-owner could not meet there obligation and had to file for bankruptcy and I couldn't cover the entire mortgage. The house was foreclosed on in late 2008. This was all disclosed to the lender before the pre-approval letter was given. I worked with their credit specialist to send a letter to clean up and error caused by the foreclosure. It was cleared and my credit score increased, but then she said my loan was "Flagged" because of the foreclosure. She said it had to do with the type of foreclosure. I would think that would be a question asked before a Pre-Approval letter is given. Any advice on whether I have any recourse?
Flag Sun Oct 20, 2013
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