Mortgage experts, please help!

Discussion in 'Credit Talk' started by Struggler, Sep 11, 2003.

  1. Struggler

    Struggler Well-Known Member

    Hi, everyone. I haven't posted here in several months. My wife and I have cleaned up our credit significantly, so credit hasn't been very active in my mind.

    Until recently, that is...

    Here's the letter I've sent to a couple of attorneys (With names withheld to protect the GUILTY):

    "A mortgage company (which shall be nameless) preapproved my wife and I for a VA/FHA loan back in April 2003. We immediately began looking for a house. We made an offer on a house in May, but the inspection revealed some things that made us change our minds about it. Before we decided not to pursue this house, the mortgage company received our package with all requested documents confirming our income, job time, etc.... In August 2003, we made another offer on another house. My brother-in-law and I even went out to the house on a weekend, with the permission of the seller, and spent almost two days working on it in preparation for the VA inspection. We were set to close on September 10th (yesterday), but about two weeks ago, we learned that our approval wasn't valid. This is supposedly because they discovered that we had some Non-Sufficient Fund (NSF) fees at our bank recently.

    The problem is that NSF fees were never mentioned at all. In fact, when we filled out and returned our packet on that first house in May, copies of our bank statements which were sent showed that we had NSF fees in every single month since January, yet nothing was said about it. They continued to allow us to shop for houses, thinking that our approval was valid. In fact, two weeks ago (September 2nd), the lady who originally gave us our preapproval assured me yet again on the phone that our approval was still good.
    My wife and I have spent the last several months looking at houses, driving around looking at neighborhoods, finding sitters when necessary for our two young boys, checking out school districts, negotiating prices, researching on the Internet, and just generally wrapping our lives up in this home search, only to be told 12 days before closing on THE house that there are problems with our bank statements, which had never once been mentioned before.

    I find it hard to believe that something which played NO part in our approval process can be used to deny us at the last minute, especially when it had never been mentioned before. If we had acted on good faith in this mortgage company's "approval" and had given notice to our landlord, we could possibly have become homeless. I should also mention that, during the course of this home search, we paid $275.00 for the first home inspection, $230.00 for the last home inspection, and $250.00 to lock in our promised interest rate through September 23, 2003, with this mortgage company.

    Is there anything that can be done? We were led over the course of several months to believe that we were approved. In fact, they upped our VA approval amount several times with no mention of NSF fees or any other problem, after having all of our documents in their possession since May.

    There are far more details involved, all of which support my complaint, but I've chosen to be brief here.

    I'm no attorney but I feel I have a strong case of negligence, at the very least, on the part of this company."

    Anybody ever dealt with this sort of thing?
  2. sirrowan

    sirrowan Well-Known Member

    When I purchased my home last year, the loan officer asked me if I had any NSF's on my bank statements. I didn't but I asked her about it. It seems to be that it was something like 3 nsf's in one month would disqualify me.

    So you've had nsf's every single month since January? How many per month?

    Did the loan officer ask you to provide them with a written statement regarding why you had nsf's every month?

    It seems that from an investor point of view, and believe me I'm not trying to pass judgement on you, because that would make me a hypocrit. BUT from an investor stand point, I would assume that you and your wife are attempting to play the floating game and are doing a poor job of it. I would also assume that you do not have enough cash to cover your current expenses, in addition to the cash to cover the increased expenses of owning a home.

    Aside from that, could you use some excuse like the bank has changed its policies and is nsf'ing you when you have made the deposits to cover the checks that you write? That the bank is holding your deposits overly long?
  3. Struggler

    Struggler Well-Known Member

    Here's the thing, though.

    1. In every single period in which we had NSF fees, we also showed a positive average balance for that period. In fact, in several of these periods the average balance was several hundred dollars. True, we've had some poor money management practices, but we've corrected this and ALL of our bills were paid on time.

    2. We were never asked about NSF fees. Not during the initial preapproval phase and not in the interim. These fees never came up until they declined our "preapproved" loan.

    3. They've had copies of our bank statements since May, yet they allowed us to continue house shopping like everything was fine. Even our realtor thought that everything was fine after talking to them.

    4. Just two weeks ago, the lady who initially preapproved us was telling me that everything was just hunky-dory with our loan, even AFTER we had been informed that there was a problem.

    I totally understand what you're saying about it looking bad, but we obviously paid all of our bills on time.
  4. Struggler

    Struggler Well-Known Member

    Bump and a clarification.

    Sorry about the long post above, but here is the short and sweet of it:

    They allowed us to spend many months house shopping, then declined us over something that we had never been asked about before, even though they had this information since MAY.

    I'm going to sue.
  5. Struggler

    Struggler Well-Known Member

    Bump. Anybody have any insight into this?
  6. jlynn

    jlynn Well-Known Member

    You would need to look at your reapproval form. Were you pre-approved "subject to blah blah" (Basically an exclusion of everything so the underwriter doesn't have to approve you". Pre-approvals are not necessarily what you think they are :(
  7. Struggler

    Struggler Well-Known Member

    You're exactly right, but the angle I'm coming from is that they KNEW all of this since May, yet they still strung us along like everything was just fine. That's my grievance here. We put a LOT of time and effort into this search.
  8. cfand3boyz

    cfand3boyz Well-Known Member

    Unfortunately, they have the authority to deny you for any reason prior to commitment. :-( Which is why I was a total basket case until we had loan commitment. I knew that even though we were preapproved it was not guaranteed until you get your commitment letter. ALSO, many times the preapproval only valid for specific amt of time. Why don't you try another mortgage company? Just because one company denies you does not mean the other will. I know when we applied there was a HUGE difference in the amt various companies would be willing to lend us. Anyway, best of luck to you. I know how stressful the process is. Good luck!
  9. Struggler

    Struggler Well-Known Member

    Re: Re: Mortgage experts, please help!

    Committment letter? I have at least THREE of them, all of which were UPPING the approval amount AFTER they had these bank statements in their possession.

    I see your point, but the problem is that they shouldn't be allowed to string people along like this. My wife and I didn't deserve it, and neither did our realtor.
  10. cfand3boyz

    cfand3boyz Well-Known Member

    Re: Re: Mortgage experts, please he

    They generally don't send out commitment letters until the appraisal of the house is complete,title search done and underwriter gives final approval. Hmm...pull out the sheets and read all of the final print. If it says they will definately lend you the money(without stipulations) then maybe you do have a case and should hold them accountable. If they found a problem they definately should have notified you immediately!

    Anyway, best of luck to you. Please keep us posted. Take care!
  11. Struggler

    Struggler Well-Known Member

    Re: Re: Re: Mortgage experts, please he

    Thanks. Sure, there were stipulations which we could easily meet, but the one thing which allegedly stopped the deal, NSF fees, were never mentioned to us until 1 1/2 weeks before closing, even though they had this info in their hands for months.
  12. jlynn

    jlynn Well-Known Member

    Mortgage experts, please he

    Call the state agency that oversees mortgage companies. Maybe you can file a complaint.
  13. Struggler

    Struggler Well-Known Member

    Re: Mortgage experts, please he

    I'm going over all of this with an attorney first. If he doesn't think that anything can be done, then I'm going to complain in every place possible.

    Thanks for the tip, though.
  14. GEORGE

    GEORGE Well-Known Member

    Re: Mortgage experts, please he

    Sounds to me (NOT A REAL ESTATE EXPERT) that they used the NSF as an EXCUSE to qualified otherwise...

    Did you WAY UNDER BID??? Like $10,000 under???

    Seller changed HIS/HER minds???

    They got a better offer (HIGHER)...just after yours was accepted???
  15. wondering

    wondering Well-Known Member

    Re: Mortgage experts, please he

    I'm in the real estate business and here is what I see happen often with mortgage companies... The loan officer (sales person) usually has a basic understanding of the guidelines required by their underwriting departement. The underwriting department makes the decisions about what they will and will not accept. There are a lot of people jumping into the mortgage business that don't have much guidence or experience. As a result, these 'surprises' can come out once a file goes to underwriting. Files typically do not go to underwriting until there is an executed contract included in it.

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