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Hi, we found a house, entered into a purchase agreement and applied for a home loan with Wells Fargo back on June 10th. We received a pre-approval and started moving through the loan approval process. Our loan amount is in the $600,000 range and we were planning on putting 20% down. We were able to lock a 30 year term at 4.00% with no origination fee. My husband and I both have excellent credit, we have both been with our jobs a number of years, however, we are both technically self employed. I get paid directly, however, my husband who is a consultant, has an LLC that he has payments flow through for no reason other than on the advice of an accountant. Everything was going smoothly, or so we thought, until the date we were supposed to provide our sellers with a formal written commitment on July 8th. The problem arose because part of our deposit/reserves were coming from my husband's business account and they were deemed business funds, so although the regional underwriter approved our loan it had to be sent to national underwriting because of the business funds. The national underwriter rejected our loan for a number of reasons, most of which were totally unfounded, such as we were moving from one state to another and that would negatively impact our businesses even though we had already provided them with ample back up that it didn't matter where we lived to do our work. We were able to get the bank comfortable with most of these reasons, except that we are still working on "payment shock." Just prior to purchasing our house we lived in a small little town to be close to family and literally lived in the most expensive rental in town, which was only $2,000. I was able to dig up a lease from 2006 and get a rental verification to show that we had paid higher rent in the past, but they seem to be stuck on this one and want to see cancelled checks. Anyway, they had the idea to restructure the loan so that it was a 75% first and a 10% second equity piece to avoid the use of business funds. We were formally approved on the first last Friday and finally got a commitment letter, but it was missing the second piece! Today we just found out we can't get approved for the second because the income ratio (or whatever it is) is 35% and we are at 40% which is OK for the 1st, but not the 2nd. They then suggested going back to the original 80% LTV structure using gift funds for part of the deposit/reserve instead of the business funds, but now they are also hung up on an American Express credit account that showed a balance of $8,000 on our credit report, which we paid off and provided a current balance letter showing a balance of $20, but now they are saying we can't do that (I forgot why) and they just brought that up today even though I told them when I applied for the loan that I was going to do it and it was never a problem before. Sorry for the long post, but I don't know what to do. They keep asking for more and more items, all of which we've been able to provide, except now I am not sure about the cancelled checks from a closed account back in 2006. We've provided everything else, but as of today, they can't get it approved and all they keep saying is that "we are working on it" and they are "trying to figure it out." They've even acknowledged that there's been a lot of mistakes on our loan and our loan officer, his manager, and even that guy's manager all seem to be pointing fingers at each other. But the short of the long of it is we still don't have a loan, rates have risen and there is no way to get a 4% 30 year mortgage -we can no longer qualify for the house with the higher rates. The sellers are beyond frustrated and we've probably lost our $8,000 earnest deposit. What do we do now? I don't think Wells will be able to close the loan, they keep coming up with all these different excuses. Is there any way to get restitution from Wells Fargo for the appraisal fee we paid and our lost earnest money?? I doubt it, but it seems so unfair that a bank could just drag this on and on and keep promising that they'll have something and then after 7 weeks still nothing, with no end in sight and this is just for a loan commitment, I'm not even talking loan closing here!
I use to work for a large lender like Wells and they have a huge amount of overlays on top of the typical guidelines. When it comes to credit cards and paying them off, you cannot pay off debt to qualify. Now that you did, they probably need to verify the source of funds that you paid the AMEX off with which will delay the process. Keep in mind the larger lenders have a huge amount of hands touching your loan which delays the process. And your processor probably has 60 + loans he/she is looking after on top of that. I was a processor a year ago before becoming a loan offcier so i know how stressful it is on both ends.
Large lenders are we call Mortgage factories. They get a lot of loans in but take for ever to get them out.
Hi, we found a house, entered into a purchase agreement and applied for a home loan with Wells Fargo back on June 10th. We received a pre-approval and started moving through the loan approval process. Our loan amount is in the $600,000 range and we were planning on putting 20% down. We were able to lock a 30 year term at 4.00% with no origination fee. My husband and I both have excellent credit, we have both been with our jobs a number of years, however, we are both technically self employed. I get paid directly, however, my husband who is a consultant, has an LLC that he has payments flow through for no reason other than on the advice of an accountant. Everything was going smoothly, or so we thought, until the date we were supposed to provide our sellers with a formal written commitment on July 8th. The problem arose because part of our deposit/reserves were coming from my husband's business account and they were deemed business funds, so although the regional underwriter approved our loan it had to be sent to national underwriting because of the business funds. The national underwriter rejected our loan for a number of reasons, most of which were totally unfounded, such as we were moving from one state to another and that would negatively impact our businesses even though we had already provided them with ample back up that it didn't matter where we lived to do our work. We were able to get the bank comfortable with most of these reasons, except that we are still working on "payment shock." Just prior to purchasing our house we lived in a small little town to be close to family and literally lived in the most expensive rental in town, which was only $2,000. I was able to dig up a lease from 2006 and get a rental verification to show that we had paid higher rent in the past, but they seem to be stuck on this one and want to see cancelled checks. Anyway, they had the idea to restructure the loan so that it was a 75% first and a 10% second equity piece to avoid the use of business funds. We were formally approved on the first last Friday and finally got a commitment letter, but it was missing the second piece! Today we just found out we can't get approved for the second because the income ratio (or whatever it is) is 35% and we are at 40% which is OK for the 1st, but not the 2nd. They then suggested going back to the original 80% LTV structure using gift funds for part of the deposit/reserve instead of the business funds, but now they are also hung up on an American Express credit account that showed a balance of $8,000 on our credit report, which we paid off and provided a current balance letter showing a balance of $20, but now they are saying we can't do that (I forgot why) and they just brought that up today even though I told them when I applied for the loan that I was going to do it and it was never a problem before. Sorry for the long post, but I don't know what to do. They keep asking for more and more items, all of which we've been able to provide, except now I am not sure about the cancelled checks from a closed account back in 2006. We've provided everything else, but as of today, they can't get it approved and all they keep saying is that "we are working on it" and they are "trying to figure it out." They've even acknowledged that there's been a lot of mistakes on our loan and our loan officer, his manager, and even that guy's manager all seem to be pointing fingers at each other. But the short of the long of it is we still don't have a loan, rates have risen and there is no way to get a 4% 30 year mortgage -we can no longer qualify for the house with the higher rates. The sellers are beyond frustrated and we've probably lost our $8,000 earnest deposit. What do we do now? I don't think Wells will be able to close the loan, they keep coming up with all these different excuses. Is there any way to get restitution from Wells Fargo for the appraisal fee we paid and our lost earnest money?? I doubt it, but it seems so unfair that a bank could just drag this on and on and keep promising that they'll have something and then after 7 weeks still nothing, with no end in sight and this is just for a loan commitment, I'm not even talking loan closing here!
Sorry, I was too upset to use bullet points. Plus, it was the big picture that was the problem. Anyway, it doesn't matter anymore as Wells Fargo finally told us today they are stuck and can't get past "payment shock" and the rental verification we provided won't work, so they can't get an approval. Now we are going with another lender and instead of 4% for a 30 year, we are stuck at 4% for a 10/1 ARM just to get the deal done!
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