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Well my husband has secured another job. We are going to tell our LO in hopes of extending the closing until we get another month of paystubs.
I understand the whole fraud thing, that is what we are trying to avoid. But in all honesty, I find it hard to believe they would send us to prison over a $70k mortgage though. If it was a million dollar mortgage, sure.....
Well my husband has secured another job. We are going to tell our LO in hopes of extending the closing until we get another month of paystubs.
I understand the whole fraud thing, that is what we are trying to avoid. But in all honesty, I find it hard to believe they would send us to prison over a $70k mortgage though. If it was a million dollar mortgage, sure.....
Super! Does your loan need to go back to USDA? They may let you close with a verification. And a pay stub post-closing.
As for jail, I seriously doubt it. I also doubt you would have made it with the new failsafe processes in place. But we do have a serious problem - there are many that have a total disregard for the new mortgage rules, which in turn is ramping up the security to detect fraud. Numerous "fraud tools" exist now (reports) for the lenders to assist with detecting irregularities. It runs every name in the file and will tell you if the landlord is an extended relative or if the the person that verified employment lives in the same home as the applicant. But the real test is how the lender uses this information. At some point, the regulators will have no choice but to prosecute fraud as a means of deterrence. That is, unless, credit guidelines are relaxed........which will probably happen in the mid 2020's, if we continue to repeat our patterns. And we will, we have so far.
Well my husband has secured another job. We are going to tell our LO in hopes of extending the closing until we get another month of paystubs.
I understand the whole fraud thing, that is what we are trying to avoid. But in all honesty, I find it hard to believe they would send us to prison over a $70k mortgage though. If it was a million dollar mortgage, sure.....
Dollar amount is irrelevant. Fraud is fraud.
Now, I'm not saying you commuted fraud - however, if your husband did not secure another job (congratulations to him, btw - layoffs are never fun, and extended unemployment is not, either) and you failed to inform your lender, that would be fraud by withholding key information about the applicant.
You should be fine provided your husband's new job is in the same industry and career field as his former. Just inform your lender of the switch in employers, and detail why, and as long as it's not a huge change in income, etc, you should be able to close without issue.
The good news is my husband will be making more money. But I am a little worried because my husband's new job isn't necessarily the same career field as the previous one, but it is his main trade that he has most experience in.
And yes, the loan we decided to pursue is the USDA so it will ultimately have to be approved through them. Which brings me to my next question, anyone know what are the USDA guidelines of income verification?
Our LO called us with the news she has ordered the appraisal, and that she needs just a few more updated documents from us when we go sign all of the disclosures in her office on Monday. We think this will be the perfect time to sit with her and explain my husband's new job situation. Crossing our fingers!
What questions do you have - unfortunately your question regarding employment is too broad - the answer would be an entire chapter of the guidelines. Can you narrow it down?
The good news is my husband will be making more money. But I am a little worried because my husband's new job isn't necessarily the same career field as the previous one, but it is his main trade that he has most experience in.
And yes, the loan we decided to pursue is the USDA so it will ultimately have to be approved through them. Which brings me to my next question, anyone know what are the USDA guidelines of income verification?
Our LO called us with the news she has ordered the appraisal, and that she needs just a few more updated documents from us when we go sign all of the disclosures in her office on Monday. We think this will be the perfect time to sit with her and explain my husband's new job situation. Crossing our fingers!
Per USDA underwriting guidelines in terms of income verification:
"- Income to be verified with a written VOE and one month’s current paystubs, OR one month’s paystubs and two years of W2’s."
So, if your husband's employer provides a written VOE, and it's in a similar field, that shouldn't be an issue. Your comment is too broad to really understand if it is in fact within the same or similar field or not.
In addition, this could be an issue:
"- Any income of a non-purchasing spouse must be verified to make sure income limits are not exceeded."
This could be the primary issue, unless your MLO already verified purchasing and non-purchasing income between both you and your husband are not over the USDA guidelines.
That is one of the new documents our LO has asked for, my current paystubs to make sure we don't go over the income limit for USDA.
To be more specific, my husband's new job is an inspector. He has had a lot of previous experience being an inspector for different types of jobs..... welding, pipefitting, construction work. This inspector job just so happens to be for road work.
His job that he was just laid off was water-jet operator. He made parts to build helicopters.
We have submitted 2 years tax returns, 2 years w-2's, 2 months bank statements, and 2 paystubs for my husband. So the only other doc's we now will need to provide are my paystubs, and husband's paystubs once he receives paychecks from his new job. He is still receiving paystubs from his previous as well, due to severance pay.
The good news is my husband will be making more money. But I am a little worried because my husband's new job isn't necessarily the same career field as the previous one, but it is his main trade that he has most experience in.
And yes, the loan we decided to pursue is the USDA so it will ultimately have to be approved through them. Which brings me to my next question, anyone know what are the USDA guidelines of income verification?
Our LO called us with the news she has ordered the appraisal, and that she needs just a few more updated documents from us when we go sign all of the disclosures in her office on Monday. We think this will be the perfect time to sit with her and explain my husband's new job situation. Crossing our fingers!
You NEED to explain this employment change to the LO now. In fact, you need to explain it before the appraisal is completed. Why? Because if this employment change is going to make it impossible for you two to get that mortgage, you are going to pay for a useless appraisal.
They are lending you money. They have the right, both legally and ethically, to know that something you have told them in your original application is not factual anymore. They will do a LOE before closing anyway. Tell them NOW.
We told our LO right away. She doesn't seem to be concerned because according to the underwriting for USDA, it states as long as there is employment it doesn't matter how long he has been at this job, what matters mainly is being able to show stable income for the past 2 years (that's where the tax returns and w-2's come in). His 800 credit score and hardly any DTI ratio helps a lot also she says.
Our main concern right now is asking the Sellers to extend closing another 10 days by giving us time to provide new paystubs from my husband's new employment. We're hoping the Sellers will agree, but we are unsure/worried being the Sellers had 2 other offers on the home when we made our offer, but they accepted ours.
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