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I will try and make this short! My husband has been pre-qualified for a mortgage in late February, we went under contract on a foreclosure home and submitted all the necessary doc's through a lending officer at a local bank (w-2's, bank statements, paystubs, tax returns). 2 weeks before closing on the home (which was scheduled mid April), the title company notified us of title issues and ultimately Fannie Mae terminated the contract stating they had to do a reforeclosure on the home. We were extremely sad about losing this home until we came across an even better home opportunity that sprung upon the MLS system the very next week!
We put in an offer and it was accepted and we are back under contract. Its been a couple days, we have received two different estimated loan cost sheets from the lending officer, one showing the costs/rates if we used USDA financing and one showing the breakdown if we decided to do conventional financing. Our LO hasn't asked us for doc's, so I am assuming she is going to use all of the docs we previously gave her a couple weeks ago....not sure.
Now...... Here's the tear jerker, my husband came home yesterday with horrible news. He has been laid off. They did offer him severance pay, so he will still receive paystubs for another 3 weeks, though his last day of employment will technically be April 14th. Our closing date is May 23rd. I guess my MAIN concern/question is......I have heard underwriters require verbal VOE's or written VOE's before closing.....will we lose this mortgage? Will his upcoming paystubs be sufficient enough for an approval?
My husband's credit score is over 800, has very little debt, and he is also still currently on payroll with another company though he hasn't received income from in several months (we sometimes travels out of state doing shut downs, iron work, etc). We have a substantial amount in our checking account to cover down payment and all closing costs, we have been saving for so long! We are thinking this out before we break the news to our LO, almost afraid it will break the deal completely! Thoughts/advice brokers????? Thanks!!!!
We decided it was best to finance with my husband only due to my poor credit score and past bankruptcy 5 years ago. Mind you, I DO WORK. My income alone would be sufficient to cover the mortgage payment as I make decent pay and have no debts. Hell, our monthly rent we pay right now is double what our mortgage would be if we closed on this house.
I am looking for advice from a LO or broker who has had experience with a situation like this, if there is a certain type of loan that has a faster closing to be able to still get approved with my husband's lay off using his last paystubs we will be receiving during closing. I by no means want to defraud anybody, but I am hearing conflicting stories from people saying once all of our doc's are accepted that we are more than likely past the approval phase and should still be clear to close. If this is incorrect, please tell me!
Standard procedure is to contact the employer within 5 days of closing to verify the applicant is still employed. At closing, he will be signing statements that the application is still current, and that any false statements constitute fraud, punishable by fine, imprisonment, or both.
Standard procedure is to contact the employer within 5 days of closing to verify the applicant is still employed. At closing, he will be signing statements that the application is still current, and that any false statements constitute fraud, punishable by fine, imprisonment, or both.
Ok thank you! Do you know if there is another possible way of financing? If example, my husband were to find employment before closing? Or possibly try adding myself on the loan with my husband to use my income even though I have very poor credit? We plan on contacting our LO in the morning to tell her the news and Im sure she will be able to advise us so I apologize if I am just being impatient asking questions. I am just researching all I can right now in hopes we still have a chance. :-(
"Mortgage Fraud is investigated by the Federal Bureau of Investigation and is punishable by up to 30 years in federal prison or $1,000,000 fine, or both. It is illegal for a person to make any false statement regarding income, assets, debt, or matters of identification, or to willfully overvalue any land or property, in a loan and credit application for the purpose of influencing in any way the action of a financial institution."
The right thing to do would be inform your lender that the deal must be canceled due to loss of employment. Knowingly withholding said information in an attempt to obtain a mortgage is blatant and outright fraud. Do you really want to face up to 30 years in prison and/or a $1,000,000 fine?
Either way, the lender will reverify employment in the week leading up to closing - they will find out that your husband is no longer employed.
Source: I'm a VP Operations Exec for a major international bank, who deals, in part, with this type of fraud.
"Mortgage Fraud is investigated by the Federal Bureau of Investigation and is punishable by up to 30 years in federal prison or $1,000,000 fine, or both. It is illegal for a person to make any false statement regarding income, assets, debt, or matters of identification, or to willfully overvalue any land or property, in a loan and credit application for the purpose of influencing in any way the action of a financial institution."
The right thing to do would be inform your lender that the deal must be canceled due to loss of employment. Knowingly withholding said information in an attempt to obtain a mortgage is blatant and outright fraud. Do you really want to face up to 30 years in prison and/or a $1,000,000 fine?
Either way, the lender will reverify employment in the week leading up to closing - they will find out that your husband is no longer employed.
Source: I'm a VP Operations Exec for a major international bank, who deals, in part, with this type of fraud.
I'm right there with you.......but with a lighter touch. I do not believe the OP's file will or even should make it to closing in its current state. Fraud should be taken seriously in our current environment, most lenders do take it seriously and many have just gone batshi! crazy.
However, I don't want anyone worrying because they just closed on a loan and didn't disclose a time-share on their application that they are going to be arrested. It's possible, but a long-shot and not likely. If someone were to report it, I would think it highly unlikely it would even make it's way to an investigation. I have yet to see an individual homebuyer prosecuted for an isolated incident........Even reported occupancy fraud gets nothing more than a shoulder shrug.
People come here for comfort, not to lose sleep at night.
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From a mortgage broker....
