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Old 06-03-2014, 11:03 AM
 
548 posts, read 687,040 times
Reputation: 573

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Going through underwriting for a July 1 closing. Bank just contacted me to get LL's info contact him for verification of rent; first they'd mentioned that requirement.

Two questions

1. How common is this? I've seen some people online suggesting banks usually only do this for files with red flags. In our case, both of us 800+ credit, steady jobs for years, not a lot of other debt, property only 1.5x our income (less than half what we could qualify for), very straightforward finances and clean transaction. So does suddenly asking for rent verification signal something, or do some lenders do this for every application no matter what?

2. We rent from a private landlord. Again, I see some statements that lenders won't accept a VOR form from private landlords, only registered property management companies. Should we assume that in a week our lender will just turn around and ask us for 12 cancelled rent checks? That would be annoying, especially since we don't have online access to docs beyond 9 months, so I'd have to order statements to get the check numbers then order check copies, ugh. We are using our regular bank, a small credit union, as our mortage lender, so at least that might smooth things a bit.

Thanks
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Old 06-03-2014, 12:57 PM
 
Location: Dallas TX
15,572 posts, read 22,997,403 times
Reputation: 23811
When we went through the UW process we were not asked this. Just a letter (from us) stating our rental amount. However they did request our bank statement going back a year showing the rental payments.
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Old 06-03-2014, 01:01 PM
 
7,946 posts, read 3,375,569 times
Reputation: 6701
Quote:
Originally Posted by veuvegirl View Post
When we went through the UW process we were not asked this. Just a letter (from us) stating our rental amount. However they did request our bank statement going back a year showing the rental payments.
Yeah, my UW asked for proof of 12 months of rental payments. I paid my rent electronically (no checks!) so I printed 12 months of bank statements and highlighted the rental payment withdrawals.

That satisfied them.
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Old 06-03-2014, 11:04 PM
 
119 posts, read 259,422 times
Reputation: 193
Our processor asked for 12 months of checks but the underwriter never asked for them as a condition. One was paid in cash so I didn't have a receipt for it and she never mentioned it. We also have a rental property that's never been late and is documented on the credit reports so maybe the underwriter just looked at that.
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Old 06-04-2014, 05:50 AM
 
1,516 posts, read 1,941,236 times
Reputation: 3130
My husband and I also have credit in the 800's like you. We were also asked this by the underwriters and we were furious (in addition to the whole other list of really intrusive questions that kept coming). My husband even had to write a detailed letter of why he had a salary cut when we moved to our new state. The LL question seems to be a standard thing in the UW's checklist. It did put us into an awkward spot though. We weren't going to give our landlord notice until later in June to give him 30 days. Unfortunately, we had to tell him a month earlier than planned. Now we get the joy of him showing the house in a few weeks thru Craigslist. He doesn't want to use a realtor to save money.

My only concern is the very last rent payment. We won't pay rent until the end of the month for the month of July. Our closing though is this month. We are asking the underwriters if we need to pay up almost a month early to get that very last rental payment in. The LL will probably have someone in the house mid July anyway so I would assume that we would get a refund from him but it kinda sucks to have to prepay to the official end of our lease to satisfy the underwriters.

I think that we are on the final stretch of our final loan approval. Boy has it been painful. I can't imagine what it must be like for someone with less than perfect credit or blackmarks in their financial history.
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Old 06-04-2014, 06:40 AM
 
Location: MID ATLANTIC
8,045 posts, read 19,712,187 times
Reputation: 9076
It depends. It depends on the loan program (USDA and 1st time home buyer loans) and the DU or LP (automated underwriting process) and what the findings say. Another factor is "housing payment shock." You could have the lowest housing ratios in the processor's stack, but if you have a history of paying $1000 and you are applying to pay $2500, your rental history is now very important. And the final variable is the human underwriting your loan - the training they had and the company policy de jour.

Just do the best you can with what you have. Chances are if everything else in the file is fine, whatever you can offer for rental will be fine (unless you are applying for the USDA, first time buyer, or state bond program - all where less than a standard down payment is required - then the rental history is a must).
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Old 06-04-2014, 09:09 AM
 
548 posts, read 687,040 times
Reputation: 573
SIggy:

We avoided exactly the same situation -- being forced to give early notice to LL -- by a couple of days. We know our LL would have preferred us to leave on July 1 instead of August 1, so had the bank asked a week earlier we'd have been forced to choose between potentially delaying the loan approval, or giving the LL a chance to counter by serving July 1 notice on us and messing up our move plans.

Had it come to that we'd just have overstayed w/o permission. It takes 3+ months to get someone evicted here, longer if the LL doesn't dot every legal "i" perfectly, and we'd have needed three weeks. We wouldn't have even had to submit an formal answer to any complaint before we moved and the whole thing became moot.

SmartMoney:

Payment shock is no problem -- total payment (including taxes, PMI, homeowners) will be less than 20% larger than our rent, and that's before the tax benefits.

We are 1st time homebuyers though, so that makes sense. Our payment history is perfect so there's no worry on that front. But, things are not entirely happy with our LL right now (see above), so there's a slight chance they won't return a form. And having to order old statements and checks (no online access beyond 9 months) is an annoyance.
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Old 12-09-2015, 08:14 AM
 
13 posts, read 48,915 times
Reputation: 10
Sorry to necro.,,. going through same thing, we have to notify LL early because of asking for cancelled checks. gonna see if i can pull all 23 from online, but i doubt it. and they want the last "1" from the previous landlord,,. 800+ credit means nothing these days i guess? of course i pay my bills.. very annoying
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Old 12-09-2015, 01:17 PM
 
11,800 posts, read 9,008,832 times
Reputation: 13201
Quote:
Originally Posted by neguy99 View Post
Going through underwriting for a July 1 closing. Bank just contacted me to get LL's info contact him for verification of rent; first they'd mentioned that requirement.

Two questions

1. How common is this? I've seen some people online suggesting banks usually only do this for files with red flags. In our case, both of us 800+ credit, steady jobs for years, not a lot of other debt, property only 1.5x our income (less than half what we could qualify for), very straightforward finances and clean transaction. So does suddenly asking for rent verification signal something, or do some lenders do this for every application no matter what?

2. We rent from a private landlord. Again, I see some statements that lenders won't accept a VOR form from private landlords, only registered property management companies. Should we assume that in a week our lender will just turn around and ask us for 12 cancelled rent checks? That would be annoying, especially since we don't have online access to docs beyond 9 months, so I'd have to order statements to get the check numbers then order check copies, ugh. We are using our regular bank, a small credit union, as our mortage lender, so at least that might smooth things a bit.

Thanks
You better find out and hopefully you have not paid for inspection and appraisal because if they knock you for this nonsense you lose that money.

By the way on mine they just asked for a phone number of the property manager to prove I lived there for more than 2 years. I don't know if they called, but I did call her and let her know they might be calling.

and I don't know what you mean by 1.5 times your income. Normally you have to be able to cover the mortgage with 30 to 40% of your income.
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Old 12-09-2015, 01:27 PM
 
Location: Boise, ID
8,047 posts, read 24,976,801 times
Reputation: 9356
Quote:
Originally Posted by so954 View Post
You better find out and hopefully you have not paid for inspection and appraisal because if they knock you for this nonsense you lose that money.

By the way on mine they just asked for a phone number of the property manager to prove I lived there for more than 2 years. I don't know if they called, but I did call her and let her know they might be calling.

and I don't know what you mean by 1.5 times your income. Normally you have to be able to cover the mortgage with 30 to 40% of your income.
The OP was last summer, so I assume they've got it all figured out by now. I also assume they meant the total cost is only 1.5x their ANNUAL income, when the usual rule of thumb is like 3.5x.

As for the rest of the topic and the most recent poster, lenders have little boxes they have to mark off these days. They have to show that they did x, y and z. Having a better credit score should get you a better rate, but it doesn't change the boxes that have to be marked off. Also, for the most recent poster, most landlords this time of year, are going to want you to stay for a couple more months. Winter, expecially in northern climates, and especially around the holidays, is a miserable time to be looking for new tenants. I'm guessing your landlord will appreciate as much notice as you can give them.


As a landlord, I appreciate getting as much notice as possible. We don't start advertising for rerental until 30 days before move out, but with extra notice, we can keep an ear out that that one is coming up, and sometimes can match the right person to the property before we even advertise (they applied for something else, but this would work better, sort of thing) and only have to show the house once, which is better for everyone.
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