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OK: So here's the jist. Any help would be appreciated greatly!
January: Contract on Short Sale signed, sent income and asset verification to my lender. They requested a letter explaining some assets. Done. Preapproval issued with only conditions being title and appraisal
Bank approves my short sale (BOA) on 4/5
Appraisal ordered and rate locked 4/15
New documents requested (all income, assets, etc) as well as credit report rerun 4/17
All documents returned. Letter explaining inquiries requested 4/19
Appraisal comes in over 40k over contract price 4/24
Home Insurance ordered 4/26
Requests information for title company 4/26
Request submitted 4/27. Told title work is/was ordered.
Submitted to underwriting 5/1. Told that they will send me an email with any conditions as soon as it clears underwriting.
We have a closing scheduled on 5/7.. Is this going to close? Putting down 20%, substantial reserves. Only thing is DTI is in the upper 40s. Own existing property going to be a rental. RI not in DTI calculation..
The processor made comments like "let me resubmit this into underwriting.. Just a second" so I'm going to assume this was seen by an underwriter. Loan will likely be sold to Fannie or Freddie and they were using "Desktop Underwriter"
All dates are approximate as I'm recreating this based on memory and emails. Timeline is pretty accurate though. The last few dates are 100% accurate.
Questions: What's next? Are we going to close on time? What's the worst thing that can happen? How long does underwriting take? What other things do I need to get done? Is this a common timeline? Do you have any other advice?
This is a mid-size direct lender. They don't close too many loans but have the lowest rates. No other company was able to get even close to their rates and fees. They do have very mixed reviews. Some swear by them others are screaming bloody murder.
Thank you to all!
Last edited by BlueBirdAbuser; 05-02-2014 at 06:11 PM..
Reason: Cleaned up formatting. New title
Not to be a smart arse, but someone with zero knowledge of the industry could render an opinion and be dead on, while the most experienced person on this board would get it wrong. I see every reason for you to make it on time, just as I see every reason why you won't make it.
Translation: you are herding cats. The only way to survive this is to stop trying to control things and roll with it. It sounds like you've done everything you can. Check in with the processor on Monday, make sure they know where to reach you.
Seriously, try to get the stress wound down. It's been a really long time since I've seen a short sale contract kicked out for missing a closing date. They just don't do that any more (unless you've been really unreasonable in the transaction and put your own bull's-eye on your own back).
Chill time. I'm betting you'll close on time or within a couple days of your close date.
Not to be a smart arse, but someone with zero knowledge of the industry could render an opinion and be dead on, while the most experienced person on this board would get it wrong. I see every reason for you to make it on time, just as I see every reason why you won't make it.
Translation: you are herding cats. The only way to survive this is to stop trying to control things and roll with it. It sounds like you've done everything you can. Check in with the processor on Monday, make sure they know where to reach you.
Seriously, try to get the stress wound down. It's been a really long time since I've seen a short sale contract kicked out for missing a closing date. They just don't do that any more (unless you've been really unreasonable in the transaction and put your own bull's-eye on your own back).
Chill time. I'm betting you'll close on time or within a couple days of your close date.
Not necessarily. We are seeing loans go through DU and LP up to 48%+ with 20% down. And, most of the time a tweak to the loan program (like go to ARM). This is where having exact taxes and insurance comes in. We've seen buyers get a 5K deductible hazard policy to keep ratios down.
There's nothing that can be done until the lender pulls it together and can see the final ratio. Exerting pressure at this point will only have a negative effect - after all its the first of the month. Application numbers are down everywhere , so there is no doubt they will do what they can to close the loan.
Not necessarily. We are seeing loans go through DU and LP up to 48%+ with 20% down. And, most of the time a tweak to the loan program (like go to ARM). This is where having exact taxes and insurance comes in. We've seen buyers get a 5K deductible hazard policy to keep ratios down.
There's nothing that can be done until the lender pulls it together and can see the final ratio. Exerting pressure at this point will only have a negative effect - after all its the first of the month. Application numbers are down everywhere , so there is no doubt they will do what they can to close the loan.
OP - hang in there!
Thank You!! I really appreciate the support!! It's just so stressful knowing you've been waiting for years for this day to come and it's all in the hands of one person - the underwriter. I tried to get a 15 year loan and everything was going well until the appraisal notified them of the $300/month HOA fee and that brought my DTI to 52.15%. They offered to close all my revolving cards and approve the loan or to extend the term to a 30 year. I chose the latter. Final ratio came in a little lower actually then planned as I got the home insurance to a little over $600 a year.
Is it usually an actual person who is checking all this stuff and running all the numbers or is it a piece of software like the one they used during my preapproval? I think they were using desktop underwriter..
The other 'area of concern' was the documents they were requesting. Some of the things they wanted were physically impossible to obtain. For example monthly statements for CoDs. The CoD bank stated they don't issue statements when no activity takes place on a CoD. I gave the processor the CoD documents (showing interest, starting balance, current balance) but she said that may not be enough..
Thank You to everyone in this thread and ESPECIALLY thank you to you
Honestly? We didn't get clear to close until 8PM the night before our 11am closing. We were going CRAZY and had resigned ourselves to not closing on time. As stated, you can't control it so let it go.
Wow, I'm really surprised that that DTI ratio isn't a problem -- high 40s? And OP, you didn't have to have a signed lease and security deposit from whomever will be renting your current house? Given that DTI, how can the lender be assured that rental income will cover the other mortgage? (Otherwise, your DTI will be even higher!!)
Sorry, I don't mean to be a downer, but I'm really surprised those things aren't red flags to the lender?
Wow, I'm really surprised that that DTI ratio isn't a problem -- high 40s? And OP, you didn't have to have a signed lease and security deposit from whomever will be renting your current house? Given that DTI, how can the lender be assured that rental income will cover the other mortgage? (Otherwise, your DTI will be even higher!!)
Sorry, I don't mean to be a downer, but I'm really surprised those things aren't red flags to the lender?
Nope! No lease. They said per fannie mae guidelines they cannot use rental income for the first twelve months as I have no history as a landlord. That's what screwing with my DTI! lol
OP, the underwriter is the only one that can run the DU at this point-as the updates come in. Carrying a departure residence is one of the few tolerances for an elevated dti. However, they will need to verify you have 6 months reserves on both properties (if they are following standard agency guidelines). Running the computer program doesn't mean human in-put is ignored.
What state are you in? And what program (fixed, ARM?)? Maybe you could relax more with a backup plan. There are numerous portfolio lenders out there with nonQM (outside guidelines) loan programs. I know one that will count the departure rental income without regard to equity and another that has guidelines to go as high as a 60% dti (restrictions apply).
The bit about the certificate of deposit - they need to show a 60 day history and because CD's don't issue monthly statements (except credit unions), it makes for a bit more work.
Try to relax, don't let others get you worked up. Many will find it too temping to push your buttons. I am betting there are a few options if you need to get the ratio down.
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