Your buying experience? (tenant, disclosure, appraised, negotiating)

[greywar]

Hmmm.. my buying experience:
In June I thought "hey I want to investigate buying a house, I know my credits not good enough, and I haven't been employed long enough, but I make good money, and want to save up a deposit and see what I have to do"

So i went to a RE, and she said she had a great mortgage broker that could get me a 0% down. so I went to the broker. He pulled my credit, which was a LOT better then expected-apparently that secured CC I got a year ago to help my credit helped a LOT. Before this I had no credit history.

And apparently 1.5 yrs is good enough (8 yrs at the prior company). So the RE i was using showed me a few houses. We offered, and were told someone else had made a better offer. Repeat this more. Then my landlord who is a RE contacted me asking if he could show me places, and pointed out that he could make the moving out experience a lot easier as the move out date could float contingent to the offer, etc. I figured hey why not? He wasn't the greatest landlord, but I figured I would give him a shot as a RE. After all the current one kinda put me off as sort of a snobby princess type. Felt a little pressured by the landlord in a way, but nothing direct.

Wow. The other real estate lady went BALLISTIC. Threatened lawsuits against me, him, accused him of things, texted me about betraying her after all her hard work (unsuccessful hard work in things that could have possibly been successful if she had wheeled and dealed on my behalf IMHO), and how she had found me the 0% down loan etc etc. Sweet mother of god, you would think we were married.

So now Im using my landlord as a real estate agent, and im kinda worried about how well he will do. He hasnt been a great landlord. Im using the mortgage company the prior RE suggested, BUT not the 0% down. the 0% down basically required me to live in bad neighborhoods I discovered after talking to my landlord, and investigating and verifying what I was told. So I need to come up with about 9K I figure for the 3.5% down on a FHA, and moref or closing. My dad pops up and gives me 5K for a down payment. Awesome! The rest is easy. but the Closing costs will take me until August I figure. Landlord points out we could offer 3% more on a houses, and ask them to pay closing. Sounds reasonable as I want to get my kids into school. So in June we offer on a house, but its a short sale-landlord tells me to offer, and if they get back to us great, but to keep looking.

Never heard back from them...so his advice was spot on. Found a house we liked that wasn't a short sale, that had JUST hit the market. Made a offer 3% higher, and them paying my closing costs basically. They accepted.

Had a home inspection performed, and found some issues. The deck needs replaced, and that's kind of a big thing. The heating, and AC units are pretty old, but functional, and the roof has about 5 yrs left on it. The water heater works, but really really should be replaced, and is installed in a unsafe manner. We ask them to replace allof this, and then my landlord/real estate agent spends a lot of time going back and forth. They want another 4K in escrow, and it to be non-refundable. RE rejects that since what if my loan failed? Id be out a lot of money. He suggests countering with increasing the escrow amount, but leaving it refundable. I'm OK with that. Bottom line after all of the back and forth is-they will replace the deck, and they drop the price by 8K, and increase the closing costs they pay (just in case they are more then expected). My real estate agent is surprised they didn't argue that the brand new deck was a capital improvement and refuse to drop the price for the other stuff. He gets me quotes on replacing anything we might need to replace, but the bottom line is...if I needed to I could buy all new things and still be ahead of the game. So I am very impressed-he has saved me money on what was already a great deal I thought. Also got a sewerscope performed at my landlords recomendation which turned out to be fine.

The appraisal comes in and reinforces that thought in the middle of this-it appraises at 10% more then I am paying.

Now the pain begins. The mortgage company. Sweet mother of god. OK I expected them to have me document my life. I didn't expect them to keep asking for things over and over because they were technologically inept. They reject the bank statements because they don't print with the bank url on them. I literally have to teach these people how to print things like this properly-wow some printers cant print the very top of a page, imagine that. They ask me to prove I don't owe child support, despite having my tax reports, and monthly statements, etc etc.

They ask me about addresses that literally do NOT exist. Asking me if I own them because there is a record for that somewhere. I loaned money to my sister that she paid back, I sent them a jpg of the money orders she used-they cant use those because they cannot figure out how to print a jpg in a way thats readable. And the bank scans are rejected because the bank blanks out signatures that show who paid it.

Yes some of thats the underwriter who we are all at the mercy of, but a lot of the questions were because they failed to use the information they had, causing questions to be asked.

Bottom line they waste 2-3 weeks on things that they had day 1 but couldn't figure out how to print. I respond to requests within 30-60 minutes, and their turnaround is 1-2 days. And they are delaying the deck work from beginning. Finally we get them to say everything looks right. Closing is supposed to be on the 6th of September. They say that looks fine. So I arrange to take the 6th to the 21st off from work (No easy feat), and start packing. But they have delayed the start of the Deck. Deck guy says he wont be done until the 6th. Deck gets done on the 3rd, and we work with the appraiser to re-appraise and verify the deck. He sends it in. I get an email the next day asking about it, then a hour later another saying "oh nm I see it was done last week"

The pain continued. Finally after my real estate agent and the sellers real estate agent get floored with requests for their signatures on things like the counter offers etc (apparently real estate agents never sign these things) they discuss this with the head of the mortgage broker. so this last week they were working late (I fielded calls at 7pm to provide documents and sign off on things like the child support, and stuff), they told me it was submitted to QA audit. Then this last Friday yhey told me to expect a call from the escrow company to arrange a signing on Monday. No call. I expect I will get one Monday, and hopefully arrange the signing that day. Im told it will then be funded the next business day. Oh and I will have a fee for extending my rate lock it appears. Nice.

So its been a exceedingly frustrating and time consuming process. One that I hope to never repeat. My landlord turned out to be a pretty incredible real estate agent that saved me a ton of money, and has been helping get the mortgage people sorted out. He has been great communicating things to me and explaining them. I'm going to advise people to use him, and that if he is representing a seller to avoid him as they will walk away thinking they got a great deal, while missing an arm and a leg. A pretty pleasant surprise. The mortgage company...well when asked for a good mortgage broker I simply said I didn't know any. The documentation requests were fine, but the inability to sort through printing problems on their end, etc is unforgivable. And both the sellers real estate agent, and mine are unimpressed. They were supposed to be helping me, not make the process worse. Which is really sort of unfortunate as I think the mortgage company owner is on the ball, but the particular person handling my file hasn't been. Thats why Im not going to tell people to avoid them, but I am also not recommending them. Seems fair.

Anyways thats my experience.

[Norm Barnes]

Feel your pain. While in Mortgages I came to anticipate information that may be required and actually told the buyers after prequalification the documentation that would generally be required and to be prepared to furnish the information quickly.

W-2 Forms for 2 years, Recent Paystubs documenting a full month of income, Tax Returns for last 2 years, Last 90 days in Bank Statements (all pages -- yes even the blank ones if they are numbered --- all means pages 1,2,3,4 not 1 and 3), proof of money on deposit and all bank information must show the banks name be prepared to further document if necessary as the monies in the transaction are essential, ID. Information they should write down is the name of the Landlord, his address and phone number. In this case where the landlord is your Realtor a reasonable underwriter would require evidence of last 12 monthly payments -- Actual checks or Bank Statements. This is to insure you are not collaborating for a good Residential reference. (Don't Laugh) The Mortgage debacle was caused by greater creativeness than this. An employment verification may be mailed but not always so give Personnel/Human Resources a heads up. Support is generally a touchy issue and may require a copy of the support order, proof of payment and that it is up to date. If you are in the process of a Divorce -- separation/divorce papers may be and probably will be required and a copy of the support or divorce agreement. In some state there is what is known as community property and they wish to assure themselves that the monies were not vested in a community property source. If you forget your ID at application they will be forced to place you head down on a copier so that they have a picture ID-------Kidding -- just don't forget your Baptismal certificate - Kidding again. To me it sounds like the mortgage company does know what they are doing and in light of all the foreclosures what would be expected.

One thing I didn't see in your relation -- Did you settle?

[AngelBy]

proof of money on deposit

How long do they need the proof of money? For example: you have a big deposit for 5-10K now, but 6-8 months later you'll buy the house, does it matter and the bank/lender still ask you about this money?

[Norm Barnes]

Sourcing of funds is an underwriting call. They could question any large deposit on any statement they may be furnished. Question is would they be inclined to ask for deposit statements that far back and the answer would generally be no. A FHA transaction will require sourcing this means if the deposit was made on 9/12/2011 and they are looking into the mortgage 9/23/2011 they will be looking to your most recent bank statement for the source of funds. They generally will require Banks Statements for the last 90 days. Underwriting mortgages for most underwriters is making common sense decisions and so the buyer should use common sense. If the money was borrowed or taken off a credit card then you will be running scared through the entire transaction but regardless of whether a person is caught or not it is not allowed to borrow money for a transaction unless the money is collateralized by something other than the property to be purchased and the payment fits in the payment ratios. Second Mortgages are permitted in some cases. FHA's handbook on credit analysis is available to the public. The current handbook is "Mortgage Credit Analysis 4155.1 rev 5" (Mark it in your favorites until you settle)(But remember a little knowledge can be dangerous and a whole lot of knowledge can kill you) and you can get a primer from that. FNMA and FHLMC has handbooks also but not as easily accessible. If you wish to surf the internet for a better answer to your question it could be posed: "How much time should money be on deposit to use as funds to buy a home?" Here is what is to understand they are not saying that large deposits on accounts are not permitted or unacceptable they are just saying the source of those funds must be reasonable and acceptable but you probably understand that already. Good Luck.

[Zarathu]

Originally Posted by greywar

Hmmm.. my buying experience:

Now the pain begins. The mortgage company. Sweet mother of god. OK I expected them to have me document my life. I didn't expect them to keep asking for things over and over because they were technologically inept.

This is off topic.....

But when I had money in a foreign annuity company in Switzerland, they decided that they were capable of handling all the transactions and didn't need their specialty company, M. Jurge Lattman. I couldn't get them to send me my money because their form for wire transfer only had enough spaces for transfers between European Common Market Countries, and didn't have enough spaces for the longer number to transfer to North America. There was no getting around it. They were too stupid to figure it out. I went all through to upper management, and they simply turned it back to the lower management that didn't know what to do. Around and around. I was privy to some of the nasty comments from the Senior VP's who were getting tired of my emails.

Finally I got my local bank(which is actually a very large Regional PA Bank) to do me a favor and open an international account for me in their corresponding bank in Switzerland. Normally this is only done for multi multi million dollar corporations not single individuals. Since the coresponding bank was literally two doors down in Zurich, they were able to make the transfer. And then I got it transfered back to my own account at home.

[AngelBy]

So if you use that money to buy a house, will the bank ask you to prove the source?

[Norm Barnes]

Zarathu

I think they might consider a Nigerian Firm to create the form. I believe they are resourceful and could sieve money through a strainer if they put their mind to it. They also have full comprehension of the internet -- yes! They may have a problem with spelling but when it comes to money they know how to track it, trap it and stuff it. I'm sorry I'm having a bad day just opened my email and everyone is saying Hi!! or Hello! and well fact is I don't even know them. Kidding of course -- but its nice to have money -- your own money.

[Norm Barnes]

AngelBy

A more simple answer be prepared to document its source -- after all how difficult could that be -- if its not documentable -- well it could be a problem if they ask for statements back that far. I detect concern -- if it was given to you and it is a relative or of unquestionable closeness like a Godfather it could still be an acceptable source -- if it fell from the heavens well good for you and possibly bad for you -- what in the verification process may cause them to ask for statements from 6 - 8 months ago. I don't know without seeing an application. You know you can get prequalified for free. They'll ask their questions and you will get a dry run of what they will ask for then you can decide if you can do it or not -- how's that for an answer. Your question was "Will I have to document money in my account from 6-8 months ago" -- I don't know how much we are talking about -- sometimes the more money down the fewer questions asked. What your question relates to is what is called "Seasoning" its a different answer in many programs: FHA, VA, Conventional, FNMA, FHLMC, Private Lenders and Savings Banks. I believe "Verification of Deposit" or VOD could lead to the questions that concern you -- the tip off here would be the average daily balance -- so be certain that as a part of the pre-qual process they satisfy this requirement to their needs and grant a commitment (Approval).

[Norm Barnes]

Okay I've activated my License. I'm learning some of the things that use to annoy me. The one that is at the top of the list is the buyer who calls for information -- you obtain and send it to them -- and they fail to acknowledge its receipt or to return your call. I'm big enough to accept rejection but it just bothers me a great deal when they choose to ignore your attempts to help. I know: "Get another job". Ignorance is out there no matter where you go -- Kharma has a way of evening the playing field.

[Norm Barnes]

I've been back in Real Estate now for about 2 weeks. In that time I have been on appointments for 3 properties which are short sales. The situations though unique are much the same -- remodifications. Remodifications are over simply explained and the reality is that once the property is under water unless some unforseen rampage of buying occurs will continue to be underwater for the foreseeable future. Is there greater benefit for the buyer or the lender? If it is FHA the mortgage is insured. FHA pays off shortfalls via FHA Insurance. Remodification balances balloons possibly will include interest in arrears, forced insurance, taxes, and other expenses. My greatest concern is that if it is insured a further faltering increases the cost to taxpayers and magnifies the problem. The lender in suffering a lost will potentially have an application of lost revenue against profits. Who is this devised plan really to serve to help? I have an idea and the last person to have the greatest benefit is the present owner. Its tough to lose a house -- its tougher to pay on with twice the balance and no equity. The examples I have seen are homes as follows: Purchased at 54K now owing 102K - Property Value 68K Tops; 167K now owing 192K - Property Value 150K Tops; 116K now owing 141K - Property Value 89K Tops. So if you are considering remodification be careful, be very, very careful.