Disability & Mortgage

[SoloStar]

Thanks! I'm sorry it's taken me so long to get back to you, but I wasn't getting any notification emails... and then I got them all at once.

I have applied for SSI, and it's still pending. I was turned down for SSDI because I don't have enough work credits and/or points or whatever it is they use to determine eligibility. My employer will only keep me on the books for 18 months (STD & LTD combined), BUT I will continue to receive LTD at 60% of what my base salary is (and 'was' after I'm terminated) until I'm 65 years old as long as I continue to meet the definition of disabled and follow the rules, etc. That's not a problem... I have Lupus and arthritis in my lower spine (x-ray diagnosed) and neither of those go away. I don't think it's going to take 18 months for me to get an SSI decision. They only have 2 doctors to get records and test results from, and I was able to function pretty OK up until only 11 months ago, so it's not like they have years and years of records and results to wade through. I won't be able to get Medicare for a long, long time I don't think. I'm only 37 years old, so I would be on Medicaid until I'm old enough for Medicare... I think.

My company uses a 3rd party benefits admin company to handle LTD. Do I get the letter (spelling out I'll continue to get payments until I'm 65 as long as I continue to be disabled) from the insurance company or my employer's HR office? I would think they'd want the letter from whichever company's name is on my disability checks, and in that case it's the benefits admin company.

Yeah, my credit is jacked up. It was above 620 before I had to stop working. But, because of the length of time it took for me to be approved for LTD (3 months), during which time I had no income at all, because STD had ended, I fell behind on things, and my credit score bit the dust soooo badly. It's somewhere in the 500s, now. However, I was told that mortgage lenders don't look at medical bills and student loans. Is that true? Medical bills and student loans are 98% of my credit profile - and my student loans are in the process of being discharged due to disability, as I type... in fact, two have already been discharged. I know that lenders don't make you list any debts that will be paid off within the next 10-12 months. Well, that's everything besides my monthly car note. So, that will have a positive effect on my debt-to-income ratio, right?

Thanks for all the information and your help.

Originally Posted by mcorrales

I just bought a home on disability income. Like you, I have a great employer that keeps me on the books (for insurance purposes) for 28 months. I also have a LTD which pays up to 60% of my income tax free up to age 65. I have one piece of advice for you, if you have NOT filed for SSD, do so immediately. It seems that they automatically turn you down the first time, hence so many lawyers advertise that they will take your case and get you money. Further, if you are turned down the first time, check with your LTD carrier, mine has a firm on retention that does all the work for you (same as an attorney) at no cost to you. The LTD provider pays for it since once SSD is awarded, you will pay part of the money back to the LTD provider and your monthly check from LTD will be reduced by your SSD benefits. Generally speaking, you will get a cost of living increase in January of every year from both your LTD and SSD. It takes at least 18 months if not longer (depends on where you leave) to get approved for SSD, so start now, lots of paperwork. I also advise taking in your paperwork each time and getting a receipt since they tend to lose things. Also, in order to get Medicare, you must get SSD and it does not go into effect until a year after SSD is awarded, so get busy. These incomes are easy to prove to a lender. Get a letter from your doctor saying that you are permanently disabled, get a letter from your LTD showing that they will pay until you are 65, thereby guaranteeing a basic income. I had no problem getting a mortgage and my credit (after being disabled) was not the best. Good luck and get going on that SSD.

[shilo0854]

I have been waiting for SSDI for 3 1/2 years. I'm finally waiting for a hearing with the ALJ (Administrative Law Judge) which I now have been appointed. Now waiting for the appointment could take upto 500 days. Since I have started this process it has been financially and mentally painful. I do have an attorney now and they are only allowed a maximum set by SS. If you have an employer it will be 100 times easier. A friend of mine went on short term disability to long term and she hardly had to do anything because of her employer handling it.

[shilo0854]

Solo, I also have degenerative disk disease with lumbar stenosis MRI confirmed as well as osteoarthritis. I have fibromyalgia, Type 2 diabetes, sleep apnea, high blood pressure and cholestrol. I'm 54 next month. SSD had denied me 2x thats why I'm in appeal. I have worked for 30 yrs but am not working now during this whole process.

[garrett15]

The most important financial asset you possess is your ability to generate income. It is also likely that the financial assets you own, both real and personal, are insured in the case of losses, But what about your personal earning ability and future earning stream. Well there are many financial & government companies which provide mortgage loans towards disabled. Well try for the best.
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Garrett

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[rcarrillo]

Originally Posted by SoloStar

Directly from the VA Home Loans FAQ website:


Q: Can my lender get my Certificate of Eligibility for me?

A: Yes, it's called ACE (automated certificate of eligibility). Most lenders have access to the ACE (automated certificate of eligibility) system. This Internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds. Not all cases can be processed through ACE - only those for which VA has sufficient data in our records. However, veterans are encouraged to ask their lenders about this method of obtaining a certificate.

That is correct, there is an automated system now. I have yet to find ANYONE that it has worked for and have had to use the old fashioned snail mail. What I have been told is its up and running for anyone serving the last few years. They are working their way back in time and trying to get more added in to streamline the VA loan process.

The last few certs that I ordered in NC took 20-25 days to receive a response. So it is important to get your certificate ordered ASAP.


As for the waiving of the VA funding fee, it is only for service related disabilities from my experience with VA. You would still need to pay (or finance into your loan) the VA funding fee if it was a disability after your service was ended. What the lender will ask for is a proof of discharge due to disability or that you are receiving VA benefits for a service related disability.

[lermao01]

I have a related question:

My wife collects SSD for a medical disability and we are refinancing our home. We documented her SSD benefits and our income and they want some sort of documentation that her SSD is guaranteed for the next 3 years.

social security said they won't document anything like that.

Isn't it simply against the law to ask for such documentation. afterall they would never ask me to document that my income is guaranteed for the enxt 3 years.

ie:

[i] The Equal Credit Opportunity Act

The Equal Credit Opportunity Act [ECOA], 15 U.S.C. 1691 et seq. prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act.

The Department of Justice may file a lawsuit under ECOA where there is a pattern or practice of discrimination. In cases involving discrimination in home mortgage loans or home improvement loans, the Department may file suit under both the Fair Housing Act and ECOA. Individuals who believe that they have been the victims of any unfair credit transaction involving residential property may file a complaint with the Department of Housing and Urban Development [HUD] or may file their own lawsuit.

[II] The Fair Housing Act

The Fair Housing Act, 42 U.S.C. 3601 et seq., prohibits discrimination by direct providers of housing, such as landlords and real estate companies as well as other entities, such as municipalities, banks or other lending institutions and homeowners insurance companies whose discriminatory practices make housing unavailable to persons because of:

race or color
religion
sex
national origin
familial status, or
disability.

[msina]

We documented her SSD benefits and our income and they want some sort of documentation that her SSD is guaranteed for the next 3 years.

I encountered the same thing, had to get a letter from my Dr. With the Diagnosis, date of onset, and that the disability was expected to continue either permanently or at least for the next three years. I thought it was illegal to ask for this information as well.

[Debsi]

The act doesn't prevent disabled people from having to fully document their income... it just protects them from being refused a mortgage on the grounds they are disabled (or black, brown, yellow, female, etc).

I don't remember ever getting proof regarding a 3 year continuance of disability income back when I did some loan processing, so I did a quick google search on it.

I found this https://www.efanniemae.com/sf/guides/duguides/pdf/current/rndodu71.pdf (broken link) (see page 6) which shows that Fannie Mae has been requiring the 3 year proof at least since October 2008. I'd wager that Freddie Mac likely has the same requirement as one usually follows where the other leads.