Is there any way we can still buy the home we've fallen in love with?

Asked by Jenna, Olathe, KS Tue Mar 13, 2012

We finally found a home with great potential, in a great neighborhood! Enough space for our small family of four, with a low enough list price that we wouldn't have to worry about losing money in today's market- the only downside was that it was a short sale. We're using a VA loan, and have somewhat of a rocky credit history, but we were approved regardless- our score was good enough to buy a home! After months of waiting on the seller's bank to approve, we've now had to re-pull credit and financial information. Our credit score has fallen two points below the minimum! Two points! We're now at a 638, and we need a 640. Our lender has told us not to renew our contract for the home, and that we're no longer approved for a home at all. Our agent is looking into finding other lenders, but it doesn't look great, especially since we got this news on the day our contract expires.. What can we do? I'm afraid the home will sell as soon as it's back on the market... We need a solution! Thank you

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James Ryan, Mortgage Broker Or Lender, Leesburg, VA
Thu Mar 15, 2012
Jenna....your loan officer is dropping the ball....he/she should be running point for you to cut through the red tape...has anyone thought of contacting Verizon directly? Has anyone spoken to a supervisor at Pinnacle? If you have all the associated paperwork, your LO should be able to handle it within 48 hours.
Best wishes meeting your deadline, Jim
0 votes
Jenna, Home Buyer, Olathe, KS
Thu Mar 15, 2012
Our problem revolves around a 6 year old account that has been reopened for collections- it's an old verizon wireless bill, a ridiculous claim that has been closed for years, but suddenly reopened in February of this year. We've sent in our paperwork to the collections agency saying that not only has the SOL passed, but the record of this collection cannot be verified. It's something that was taken care of years ago, and the company- Pinnacle- is known for this type of behavior. Despite sending in the paperwork and demanding it be deleted, this process could take months to rectify. We don't have months. We switched to a lender that was able to do VA loans with a score down to 600, but he's come across that same collection on our CR that he says needs to be taken care of before we can move forward... I'm quite defeated, leaning towards a lease-to-purchase option with the home owners. As it is a short sale though, I'm not sure if that is an option for the sellers, since they have already filed and been approved for the sale. We may be forced to walk away. Thank you everyone, and further suggestions? We seem to be stuck.
0 votes
Jenna,
Just checking in on you to see if you ever received the help to resolve your issue, and were able to buy? If not, I'll be happy to help you.
Just email or call me, at 913-271-6990. MarcyCarter@KW.com
Flag Mon Oct 29, 2012
Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Wed Mar 14, 2012
My guess is you cranked up a credit card just a little to high. Even a credit card with a low limit can smash a credit score. Any that are within 75% of the limit are hurting. Pay the one down that takes the least amount to below 25% of the limit and the scores will bounce. A lot of lenders will go to 620 on a VA, you can transfer your loan application to another lender on a govvie, good luck,
0 votes
James Ryan, Mortgage Broker Or Lender, Leesburg, VA
Wed Mar 14, 2012
Hi Jenna,

I am surprised your loan officer did not analyze your new credit report and help you get back over 640 or seek out other lenders that offer VA below 640. We offer VA down to 600 through a lending partner, but most lenders, including the one we use, charge a premium to the rate.
Since your scores are a bit low, choose ONE lender to work with now, and only allow one credit pull. Otherwise, you might lower your scores even more at this point. I am happy to help you!

Best wishes,
Jim, American Bank
703 615 4675
0 votes
John Bender, Agent, Corona, CA
Wed Mar 14, 2012
If you went to 638, you still have fair credit. You generally don't have a 638 with a bunch of collections, charge offs, etc. Often times, a lower 600 range score is the result of higher credit card balances. If this is the case, look to see if there is a way to pay an account or two down. The effect to your FICO will be immediate. Even if you have no money, you could potentially advance on a credit card that is early in its billing cycle and pay down a credit card that is late in its billing cycle. A good lender should know how to do this. 2 points should be VERY easy to pick up. You agent really shouldn't be trying to find a lender that will take a 638 VA...it's not going to happen. Your lender should be trying to figure out how to get that score up ASAP so you can save your deal.

You can easily do FHA down to a 620, but then you're paying 3.5% down and you have annual mortgage insurance...two negatives when compared to VA. 638 isn't a great score, but it's not horrible. Don't let your agent/lender convince you that you should be at their mercy.
Web Reference:  http://inlandfinancial.net
0 votes
Tina Lam, Agent, San Jose, CA
Wed Mar 14, 2012
Sounds like you're in a really tough spot. Have you tried other loan programs like FHA?
Web Reference:  http://www.archershomes.com
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