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Discussion in 'Credit Talk' started by roni, May 18, 2001.
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You know Iâ??m more of a back-end mortgage guy, meaning my area of expertise is heavier on the recovery end of mortgages; but Iâ??ll give your concerns a go nonetheless. That is considering that some aspects of origination underwriting entail correlations to the back/recovery end, so with that in mindâ?¦ Iâ??d be willing to give your concerns a shot.
Ok. I am going through underwriting. I have been having some major problems. Maybe it is my imagination but my mortgage rep doesnt make me feel comfortable. Meanwhile I am putting more and more money into this purchase.
My first concern it them verifying my employment. I have worked hella jobs since I graduated dental school. They want a 2 year work history. Well I worked in 5 dental offices for the year 1999. This included working at the hospital finishing my residency (1) . Next, I worked at 2 jobs parttime my first month independent (2). I left both those offices when I got a better offer, worked 2 months there (1) and then I got an even better offer and worked there 3 more months to finish out 1999 (1). Ok so I jumped around a bit. But this was b/c I would get into an office and find out that I didnt like it or didnt fit or they lied about how they would pay me etc. I was not out of work at all for the entire year..i just jumped around in the same field Dentistry.
For 2000, I went back to one of the jobs I worked at in 1999....that would be #4 above. I worked there from 1/00 - 9/00 when I moved to philadelphia. Also i worked parttime at another office from 1/00 to 4/00 until I just got burned out. Then i went to fulltime only at the other job.
Then I moved to philadelphia from NYC and started at a dental office in PA. I worked there from 9/00 to 12/00. I left there and started at another office in 12/00 and worked there until 4/01. This practice was sold on 2/28/01. The new boss tried to cut my salary so I left. I started as a temp at my present position in 4/01. They offered me the position permanent and I started under a 2 year contract on 4/30/01. My salary is $90,000/yr at this new job. They have excellent benefits and student loan repayment for this salary was good for me.
But now, I feel bad b/c my lender is questioning me about my 2 year employment history. I worked without breaks even though I worked all over the place.
The home purchase is $160K. I supplied them with 1999 w2's and 2000 w2s. I made about $60K in 1999 and about $78K in 2000.
Furthermore, the lender want proof of my army bonus. I sent them my bonus contract which states I get $10,000 annual for my service as a army reserve dentist/officer. I sent them the w2 from last year and the paystub from the army. They still want me to explain this income. I was like what? how.so I sent them a letter to call the ARmy incentives manager to explain it. They want me to sent them the direct deposit into my bank account statement. That was in nov. i dont have that statement anymore..Damn!
I get my regular army drill pay. This is $350/mo. I just got a paystub for this money and sent it to them. I hope this will be enough to verify this income.
All in All, they are making me feel like I cant afford a $160K purchase and I make 103,600/year presently. I am new in my career. I graduated school in 1998 and residency in 1999.
Ok, enough for one post. What do you think. What does everyone think? I am just flustered.
I have another question after this one....
Is this your first home purchase, are you going through an FHA lender?
You shouldn't be having these types of problems...even if they trip off of you changing jobs so often, you have been working in your field, so what difference should it make to them? I did an FHA, and I went to 3 different lenders before I found one that I felt comfortable with. Actually, what I ended up doing was getting a buyer's agent that took me to one of her "preferred" FHA lenders that she had a good relationship with (made my life a lot easier).
Good Luck...more than just
Yes this is my first purchase. Yes it is FHA. This lender is the only one that can be used by this builder for them to pay the closing cost so they have me by the ----s. They have not actually said that I am a risk, but they ask why this and that and want explanation for everything. I feel like I should qualify on the $90K alone and they making me call the army and beg for paperwork left and right. I am so scared.
OK next question. This is a BIGGER PRoBLEM
My lender wrote me a letter asking me to explain a lawsuit against me. I havent received any court papers but I know what it is about.
One of this conehead bosses that I listed in the prior thread owes me $2,068 for my final paycheck in 12/00. This guy held my check while I was completing the 30 days notice I gave him. I took this to 2 labor attorneys for advice and then I filed a complaint with the Philadelphia Dept of Labor. They investigated and contacted this guy and he said "well I am gonna sue HER for breach of contract". HIs conehead is a Dentist and a law student. He stays in court and just decided to play this game with my check leaving me with the expense of getting an attorney b/c he always represents himself. He is a known nutcase...which is one of the reasons I left his office. He is constantly being sued by mothers of the kids he roughs up but they are usually poor and dont show up with proper presentation in court..So he feels he is above the law. But it leaves me stuck. I have to explain a frivolous lawsuit. I called my attorney this week and told her that I have a suit against me but havenot received any paperwork but my mortgage lender informed me of it. She check it all out and confirmed that he doesnot have a case and this is a done deal. I am leaving it in her hands.....But myquestion is.....CAn I get a mortgage with a pending lawsuit. My lawyer found out that the from the dept of labor that the case is scheduled for arbitration in 1/02. I am not sure of the legal terms so please forgive me. This guy is suing me for $22,000 which is absurd.
I know he cant win this in court, but I am worried is it a big problem when getting a mortgage if you have a pending lawsuit. The lender wanted explanation and supporting documents about this.
Also, they questioned me about my new $16,000 loan from VNB. Well this was for refinancing of my HAFC auto loan... I have to send that info in to them as well. I have 9 envelopes of info to send my lender in addition to all the paystub and w2 I have sent them already.
Take a deep breath, this is just part of the process...remember, they want (need) you to get the loan - they have to eat too....I am a little confused about something though--with an FHA purchase, YOU have to put down 3% (no matter how much the seller contributed), which is about $4800 for you (I paid $160K for my house also)-- I didn't think that a builder could pay that for you (in which case you could use what ever lender you wanted)...the biggest hurdle I had was proving that I had $4800 in the bank, prior to my app being sent to the underwriter (and it could not be a gift). I tried to check this stipulation via the FHA.gov site, but of course it is down.
Since I purchased my house via a private transaction, maybe the rules are different...
Getting out of my element here, so this is absolutely...
The builder is paying closing cost. I am paying the down payment. I dont understand your statements. sorry.
Foremost (again) take what Iâ??m about to recommend with a grain of salt, since originations arenâ??t my strong-pointâ?¦ Nonetheless, donâ??t be scared because youâ??ll probably get a loan irrespective what youâ??re going through now. That notwithstanding for a moment, maybe it would help for you to know whatâ??s happening at present..?
In order for a lender to gain a HUD (FHA) loan guarantee certain criteria must be met, mostly stemming toward due diligence, making certain the loan holds compliance within lending guidelines. Because of your frequency of differing employment, albeit in the same field, there is no doubt (even in your mind) that youâ??re being considered as a skip risk (you may be surprised at the number of folks who simply walk-away from a home, if things get tough).
I sense the underwriters are concerned because youâ??ve no long-term track record in Dentistry, irrespective that you make respectable bucks. Look at this from the underwriterâ??s position, if only for a moment? You make good money, collectively more than most, yet the builder is assisting with closing costs. The natural question, from an underwriting/recovery potential stand-point, is why â?? since you have shown a sizable income?
Truly in the underwriterâ??s mind guidelines dictate that more investigation be done, primarily to establish certain factors related to risk-management: like why you make good money, but donâ??t have all the down? This is particularly why the lender wants to sustain things like your bonus money, and where that money went. Bear in mind that records like these paint a picture, if you will, demonstrating oneâ??s management of money.
Tell ya what Iâ??m gonna doâ?¦ Iâ??m going to call a friend a GMAC mortgage originations and ask him to verify the following, because I believe itâ??s non-compliant to essentially FORCE you to deal with a certain (pre-selected) lenderâ?¦ But since Iâ??m not completely sure, Iâ??ll let you know Monday (if I find anything out in this regard). As I recall, but I could be in error here, HUD parameters prohibit locking of lending sourcesâ?¦ This goes back to the days of kick-backs (that are now opposed by Reg-Z). But here again, Iâ??ll check with a direct source lender.
All and all, Roni, if you donâ??t feel comfortable with your mortgage lender maybe thatâ??s womanâ??s intuition telling you something? Either that or your experience on this (and other boards) has made you a bit sharper, and much more in-tune with credit matters. In any case, take heartâ?¦ You make enough income that some lender is going to buy the paper, but it may not be FHA oriented. (Conventional prducts are actually lower in rate a present than FHA, so you may want to start considering alternative programs.)
My lender told me that I wouldnot qualify for a conventional loan without 20% down.
I do have the down payment in the bank. I got my bonus in 11/00. After taxes I had $6500. I have bank statement from that time showing the money sitting there. I used some....but I have the $4500 there when I applied for the loan. I have given them $2000 so far towards the purchase and $570 for options.
Oh so you are saying that I should have more put away for the closing cost too. I refuse to buy a home without the seller paying the closing cost...
Can you address my lawsuit question?
Just FYIâ?¦ There are conventional loan products currently available featuring as little 5% down, 30-year fixed at prevailing, with carry-backs permitted. If your â??lenderâ? is telling you otherwise, this could (please note I said, could) be a matter of self-interest. Iâ??d shop around on the sly, and Iâ??m absolutely certain youâ??ll find similar terms (5% down, etc.) available. Hay, shopping couldnâ??t hurt. [;-)
I dont want to miss the seller paying closing cost. they state that they will only pay the closing cost if i use this lender.
See this is what gets me, your seller essentially dictating with whom it will contribute closing costs. I just canâ??t help thinking Iâ??ve read somewhere that this is illegal, pursuant to Regulation-Z (lending law). But here again, Iâ??m not absolutely sure so Iâ??ll check for you and post accordingly. Now as to that pending suit..?
Well, hereâ??s the news yet please donâ??t take it out on the messenger. I seriously doubt the lender will fund the loan with this matter pending, although a lender could issue a conditional approval â?? subject to the case being resolved before funding (for a certain period of time). Now on the bright side, if one is to be found, whoever is suing you could be held liable if youâ??re denied credit based on an erroneous (baseless) claim.
So if your lender turns you down because of this pending litigation, it being a loss risk to the lender should you lose the lawsuit. Iâ??d suggest proposing to your lawyer that a claim for malicious persecution be sought, if you prevail against the lawsuit and suffer damage (loss or your potential home as a result). Your lawyer may even consider using this as leverage to get the case dismissed, with prejudice, so you can proceed with loan plans.
The latter is definitely something to review with your attorney, as she is far more familiar with case aspects than youâ??ve explained here. Nonetheless, warning the party suing you that you intend to pursue a redress if you prevail could be a doable tactic. Here again run this aspect by your lawyer, as sheâ??ll advise accordingly.
thanks for your honesty. I plan to propose this to my attorney immediately.
Youâ??re very welcome Roni, I just wish I could offer better news. I feel bad for you, as I know youâ??ve worked long and hard to get to this point, now some bozo comes along and cast some doubt on the dealâ?¦ Idiot!
Anyway, best of luck, and yes by all means; consult with counsel about negotiating a resolution. I tend to think if there are truly no grounds/merit to the lawsuit, the other party would be stupid to continue â?? after being put on notice of your risk regarding the mortgage. Hay if all else, itâ??s worth a shot pushing back a bit. [;-)
Pushing back a little??? You mean what by that. I am the one being sued.
I replyed just as you had to leave, I guess. What I said was that I have only bought one condo in my life and I hated the whole process. If I didn't have to do it again in order to buy something I wouldn't. I hate it. They make you kiss thier butts six ways to sunday just to have some of their money.
I can't give you any suggestions since I don't know enough to help constructively. I can cross my fingers for you and hope it all comes out well. I alwasy thought that if you stayed in your field of choice the employment didn't matter. But I can see what credit defense is saying (he said that right) about them wanted some stability.
Hopefully we can get through this whole process without the troubles you are having.
What I mean is that all litigated matters are by nature adversarial, usually prosecuted in one of two root ways: by overwhelming evidence or with an aim to win by attrition (out spending the other guy). Since you are being sued the other party is essentially pushing you, yet may not have considered your possible redresses if you prevail (win the case).
Given this aspect, which is speculative on my part. Perhaps if your attorney informs opposing counsel that you stand to risk loss, should their claim be proven malicious; this would give them some reason to reconsider what they are doing and maybe back off (dismiss the case against you, so you can continue with mortgage plans).
Thatâ??s what I meant by pushing back a little, letting the other party know (through counsel) that they have risks too. Oneâ??s they may not have necessarily considered fully, maybe in some zeal to press forward with their lawsuit.
Stop whining and give them the paperwork. They're just papers. If you don't have your bank statement, go to the bank and get a printout-- signed and dated by the teller, and stamped with their rubber stamp. Beat them at the game: Supply all the documents they ask for and firmly request a written commitment or denial within 10 days.
If your credit scores are below average (725), you're going to be treated as below average. Why didn't you obtain a pre-approval before making a contract on a house? Don't you think you would get a better deal-- even with all that jive about the builder paying the closing costs if you use their lender-- if you had a written commtiment from a lender?
What is your credit score? I'm presuming that it is low (FHA) and you're intimidated by the lender who you think may be your only chance just because they're the builder's pal. Builders are the last of the cowboys and only know that they have to close your deal to be able to get money to build the next house. If you don't watch out, that lender will let you close on an incomplete house and leave you to battle with the builder to fix that cracked driveway they said they'd have somebody out "right after" the closing. Most builders have been in the sun too much, have breathed too much sawdust, and drank too much beer.
You seem to be pretty smart based on some of your other posts. You should be able to figure out your legal status with regard a lawsuit. Get your own credit reports directly from the national CRAs. Get your bank records. Get your pay records. Get a fire-proof strong box. If you threw away your November bank statement, you're not living right.
The lending and underwriting guidelines for FHA loans are in HUD pamphlet 4155.1. See http://www.hud.gov . The Real Estate Settlement Procedures Act (RESPA)(aka Regulation X)( http://www.hud.gov:80/fha/sfh/res/respa_hm.html ) contains the rules about closings, referrals, relationships between sellers and lenders, etc.
Nothing to my knowledge prohibits a builder from dictating what lender you must use.
You're too desperate. Your builder and lender are bullies. Get into the driver's seat; this isn't that hard.