Financing in Grayling>Question Details

Teresa, Home Buyer in

recently i applied for a mortgage from wells fargo, i recieved back a pre-approval from them, in the

Asked by Teresa, Thu May 8, 2008

meanwhile i have found a home and put a bid in and it was accepted, now they are saying i was not approved, any answers on what i should do??

Help the community by answering this question:


Teresa: As others have indicated there are various levels of "pre-approval". I've seen some that say pre-approval but indicate phrases like pending final credit check or verification by underwriter. Only those letters indicating pending appraisal are actually good pre-approval letters. Please read the documents you received closely, it will contain some type of indication of what steps remain before they will lend.

Another possibility, might be that underwriting guidelines for that lender changed. I read an article recently that for some lenders the guidelines changed between when you were pre-approved locally and the paperwork reached the underwriter for final approval. Of course, your loan officer may not have been aware of the changes until after completing your paperwork. I suggest getting this clarified and see if you qualify at all under their new guidelines. (do not pay any additional money)
Web Reference:
1 vote Thank Flag Link Thu May 8, 2008
Teresa, this was probably a pre-qualification. If numbers were just spoke over the phone and there wasn't the exchange of documentation, sorry to say that your loan wasn't approved. We have an in house underwriter at my company and what the policy is, is that the client needs to bring all of the documentation including w'2's for the last 2 years, 1 month of current pay stubs, 2 months of current bank statements, and any investment statements. From there an underwriter runs your application through the automated underwriting service. If there has been an approval issued, there will be conditions that need to be met before closing. We issue whats called a commitment letter. Our community knows once this document has been produced, they have a true approval. I would be more than happy to assist in anyway that I can! Make it a great day!
1 vote Thank Flag Link Thu May 8, 2008

When you trust the pre-approval you have received from a lender and now you run the risk of losing your earnest money, that's not only a horrible feeling, it also makes you not want to trust anyone else.

Please make sure you get a second opinion with a mortgage provider who is extremely qualified and recommended to you by people you trust. Make certain they explore every financing option available to you. The loan officer who gave you the false pre-approval may not have checked out all your options.

Ask some people you trust whom they would recommend for you to talk with.

Good Luck!

Trey Bowden
(405) 340-3277
0 votes Thank Flag Link Thu May 8, 2008
I have watched this happen at least 3 times within the last few months in the Chattaooga, TN area. When you initially talk with a company about a mortgage, a lending officer simply runs your credit to see what your overall score is. At that time, if your score is acceptable to that company as far as their conventional loan qualifications go, then they tell you you are "pre-approved". That is only the first step and is basically "window dressing" in this day and time. When you actually apply for the loan on a particular property, the company underwriters then delve much deeper into your debt to income ratio. THAT'S when a lot of people become "unapproved" for the particular loan they make. First, ask the company you applied with exactly WHY you are not approved. Then, check with all 3 credit bureaus (Experian, etc.) to get your scores. Ask the loan officer specifically what you need to do in the meantime to clear up whatever negative aspect of your credit needs taken care of and how long it should take to straighten this out. As far as the mortgage you applied for, if you don't wish to lose the property, you might ask the seller's agent if the owners would entertain a short term lease-purchase on the property (say 3-6 months) and you could go ahead and move into the property and pay rent each month until closing. At the end of the 3-6 month period, however, you would HAVE to close on the contract or you would forfeit your 5% earnest money deposit (normally required on lease-purchase contracts). Just a thought. Good luck to you. I hope everything works out in your favor!

Alice Garrigus
Keller Williams Realty~Downtown
Chattanooga, Tennessee
0 votes Thank Flag Link Thu May 8, 2008
Sounds like they did not FULLY check your credit and other important factors!
Web Reference:
0 votes Thank Flag Link Thu May 8, 2008
Ellen is right, until all your income and debt information is verified and presented to an underwriter you are only pre-qualified as opposed to pre-approved or formally approved. It's also possible that the guidelines for the program changed or the program you originally applied for got pulled. That's the harsh reality of the mortgage industry these days.
I advise you to check with a reputable lender to find out if you are approvable or not. Your realtor should be able to refer you to a good one, or if you like I'd be glad to take a look at your situation.
0 votes Thank Flag Link Thu May 8, 2008
Teresa: Perhaps what you initially received was a "pre-qualification" which is a preliminary approval. Until you complete the full application and your information is checked for accuracy (credit scores, employment, and assets) a pre-approval will not be issued. Did you apply on-line or did you actually meet with a mortgage representative? I would suggest you clarify with a Wells Fargo mortgage representative what you actually received and if it was a pre-qualification letter, apply now for a pre-approval. Good luck!
0 votes Thank Flag Link Thu May 8, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer