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Old 09-09-2014, 01:47 PM
 
Location: Raleigh, NC
19,374 posts, read 27,608,456 times
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Quote:
Originally Posted by Ahelben View Post
I'm in a hairy situation like this as well. My husband and I did a quick pre-approval through a credit union before we went out to look at homes. We just did not want to even put ourselves in that boat before we got pre-approved. It came back good to go and we set about looking. We fell in love with a new home in a perfect area just a few days later. The home builder has a deal running ($155,000), but everything has to be approved by the 29th of this month.

We began the process, and BOOM - come to realize we cannot use my commissions toward qualifying. I'm in sales, but I've only been in the job for 1 year. AND - as it turns out, you cannot use commissions toward qualifying until you've been at the job for two years. Yikes. So this means when we pre-approved, we were using my extra income, and now, that extra income is out of the running, which really is unfortunate because it pretty much halves my income.

On top of this our debt to income ratio was already in a tight spot. Yes, we pay our bills on time, we have no defaults on our credit history, BUT we have a good amount of debt between the two of us: two cars, motorcycle, student loan, and my husband has CC debt ~$10,000 (I have no CC debt having paid it all off about 3 months ago).

Only good points are that our debts are always paid, my husband's credit score is in the high 600s (good), and mine is 765 (excellent), we are using a VA Loan (0% down, we get all of our earnest money back regardless of what happens), my husband is active duty military (going on 9 years) and he just got a raise last month, and lucky for us - the loan officer is a friend who I am sure is going to go the extra mile for us. STILL - the sales guy at the home builder let me know our ratios were "tight" but he said "we are in good hands".

Together we make about $85k annually (just salaries, not counting my commissions), but I am still thinking it won't be enough to get us qualified. :-/

I am biting my nails over here and my stomach has been sour ever since we found out about my income situation. My husband has been angry and even said he was ready to "back out" of everything yesterday, but I told him we've come this far, we might as well finish it out - whatever that outcome will be.
I'd say you'll be lucky if you don't get this house. Please - pay off some of those loans with that extra commissions, then buy a house. This sounds like a nightmare waiting to happen.

And thank your husband and your family for your service.
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Old 09-09-2014, 02:53 PM
 
3,805 posts, read 9,288,010 times
Reputation: 4978
Quote:
Originally Posted by CeejHome View Post
I am not sure if it went through DU, DO or AU. I do know that, initially, in order to get "pre-approved" I had to submit a credit report, bank statements, pay stubs, and 3 years of tax returns. (even though after I found a house, they asked for all of that info over again.) ALSO, I went into underwriting last week, and they kicked-back citing "SUSPENDED", that's where I learned about all the flaws in my credit report and began fixing items, (i.e. my middle initial wasn't added to the contract) Should I still expect it to take long, once it's back in underwriting?

I truly appreciate everyone's honesty!
Well, first of all, they should ask for a contract amendment changing your name, NOT re-pull credit with a name change. Suspense is not as good as Approved with Conditions.

Underwriting is different, company to company. I'd like to see the Suspense List. Can you mark out your personal info and post?
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Old 09-09-2014, 02:58 PM
 
3,805 posts, read 9,288,010 times
Reputation: 4978
Quote:
Originally Posted by Ahelben View Post
I'm in a hairy situation like this as well. My husband and I did a quick pre-approval through a credit union before we went out to look at homes. We just did not want to even put ourselves in that boat before we got pre-approved. It came back good to go and we set about looking. We fell in love with a new home in a perfect area just a few days later. The home builder has a deal running ($155,000), but everything has to be approved by the 29th of this month.

We began the process, and BOOM - come to realize we cannot use my commissions toward qualifying. I'm in sales, but I've only been in the job for 1 year. AND - as it turns out, you cannot use commissions toward qualifying until you've been at the job for two years. Yikes. So this means when we pre-approved, we were using my extra income, and now, that extra income is out of the running, which really is unfortunate because it pretty much halves my income.

Your lender, or loan officer, should have caught this prior to pre-approving you. Change lenders. Not trying to insult anyone, but this is a rookie mistake.

On top of this our debt to income ratio was already in a tight spot. Yes, we pay our bills on time, we have no defaults on our credit history, BUT we have a good amount of debt between the two of us: two cars, motorcycle, student loan, and my husband has CC debt ~$10,000 (I have no CC debt having paid it all off about 3 months ago).

Only good points are that our debts are always paid, my husband's credit score is in the high 600s (good), and mine is 765 (excellent), we are using a VA Loan (0% down, we get all of our earnest money back regardless of what happens), my husband is active duty military (going on 9 years) and he just got a raise last month, and lucky for us - the loan officer is a friend who I am sure is going to go the extra mile for us. STILL - the sales guy at the home builder let me know our ratios were "tight" but he said "we are in good hands".

How did the builder know anything about your ratios?

Together we make about $85k annually (just salaries, not counting my commissions), but I am still thinking it won't be enough to get us qualified. :-/

I am biting my nails over here and my stomach has been sour ever since we found out about my income situation. My husband has been angry and even said he was ready to "back out" of everything yesterday, but I told him we've come this far, we might as well finish it out - whatever that outcome will be.
Anger results from unmet expectations. Again, this is square on your Lender. I have seen VA Automated approvals with 65% Debt Ratios. But you have to know how to build the file accurately. And how to make sure borrowers know everything at all times. It sounds like you are sticking with the lender. Best of luck
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Old 09-09-2014, 04:08 PM
 
15 posts, read 21,504 times
Reputation: 11
Quote:
Originally Posted by Pfhtex View Post
Well, first of all, they should ask for a contract amendment changing your name, NOT re-pull credit with a name change. Suspense is not as good as Approved with Conditions.

Underwriting is different, company to company. I'd like to see the Suspense List. Can you mark out your personal info and post?
Here is the list


SUSPENDED - The disputed account needs to be fixed or will have to do a manual underwrite. More information will be required, as well as two month's reserves. my report read "dispute resolved" I called and had this comment removed. Account is current and in loan consolidation

IHDA - Paystubs - Provide updated paystub to be dated within 30 days of closing date. i gave them this

Property-Sales Contract - Fully Executed Sales contract including all riders/addendums - add borrower's middle initial and remove all personal items from page 1 of the contract and all parties to initial. realtor and LO is taking care of this

Disputed Account - shows as a disputed account. Either need to get the account cleared up with the credit bureau or will need to do this as a manual underwrite. With a manual underwrite, I will need additional information, including two months reserves. this is the same as the first, I'm not sure why it's listed twice

Credit-Signed Explanation - Signed credit explanations from borrowers regarding the following: the disputed account with shows on the credit report stating that there was a claim filed with the government for insured portion of balance on loan; student loan assigned to government. i wrote letter of explanation, long story short, they are both student loans. One was disputed (which I don't recall doing, however accepted responsibility) the assigned to gov'ts boggles my mind. But again, I accepted responsibility, and included a letter that outlines that I was enrolled full time in school and waiting for my SL lender to be auto updated, but that's didn't happen with this particular lender. As of today, all SL have been consolidated and are current.

Termite Inspection - Provide a satisfactory termite inspection per the contract. this was included with the inspection that I paid for and gave to them already

Credit Report - Provide verification that borrower authorized Key Mortgage to pull credit report. this was weird, because I signed that form. My LO will provide them with it.


Thoughts? Thank you so much for your advice!

Last edited by CeejHome; 09-09-2014 at 04:16 PM.. Reason: Spelling
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Old 09-09-2014, 05:19 PM
 
3,805 posts, read 9,288,010 times
Reputation: 4978
Quote:
Originally Posted by CeejHome View Post
Here is the list


SUSPENDED - The disputed account needs to be fixed or will have to do a manual underwrite. More information will be required, as well as two month's reserves. my report read "dispute resolved" I called and had this comment removed. Account is current and in loan consolidation I think this is a head's-up note so as to highlight the fact that this triggered the suspense, not the other items listed below.

IHDA - Paystubs - Provide updated paystub to be dated within 30 days of closing date. i gave them this check!

Property-Sales Contract - Fully Executed Sales contract including all riders/addendums - add borrower's middle initial and remove all personal items from page 1 of the contract and all parties to initial. realtor and LO is taking care of this Good!

Disputed Account - shows as a disputed account. Either need to get the account cleared up with the credit bureau or will need to do this as a manual underwrite. With a manual underwrite, I will need additional information, including two months reserves. this is the same as the first, I'm not sure why it's listed twice This is the official Condition- 1) does it say "dispute resolved" and 2) what is the Loan Consolidation you reference above?

Credit-Signed Explanation - Signed credit explanations from borrowers regarding the following: the disputed account with shows on the credit report stating that there was a claim filed with the government for insured portion of balance on loan; student loan assigned to government. i wrote letter of explanation, long story short, they are both student loans. One was disputed (which I don't recall doing, however accepted responsibility) the assigned to gov'ts boggles my mind. But again, I accepted responsibility, and included a letter that outlines that I was enrolled full time in school and waiting for my SL lender to be auto updated, but that's didn't happen with this particular lender. As of today, all SL have been consolidated and are current. Does the credit report reflect this in a clear and irrefutable manner? Can you get letters on letterhead confirming? This is important.

Termite Inspection - Provide a satisfactory termite inspection per the contract. this was included with the inspection that I paid for and gave to them already No biggie.

Credit Report - Provide verification that borrower authorized Key Mortgage to pull credit report. this was weird, because I signed that form. My LO will provide them with it. Easy stuff.


Thoughts? Thank you so much for your advice!
This is a clean approval. A "cool" underwriter would have called the LO and said "hey I don't want to suspend this, can you find out for me what the deal is with the disputed account and this alleged Gov't debt? If you can get me answers/info/docs to clear it up, I will add it as a Fulfilled Condition, and we can get these other few items quickly." Or something to that effect.

1) Credit report being cleared of the dispute is not a problem, 2) again, what's the consolidated loan thing? 3) Can you clear the "assigned to Gov't" thing?
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Old 09-09-2014, 05:38 PM
 
15 posts, read 21,504 times
Reputation: 11
Quote:
Originally Posted by Pfhtex View Post

This is a clean approval. A "cool" underwriter would have called the LO and said "hey I don't want to suspend this, can you find out for me what the deal is with the disputed account and this alleged Gov't debt? If you can get me answers/info/docs to clear it up, I will add it as a Fulfilled Condition, and we can get these other few items quickly." Or something to that effect.

1) Credit report being cleared of the dispute is not a problem, 2) again, what's the consolidated loan thing? 3) Can you clear the "assigned to Gov't" thing?

The loan consolidation is my student loans. I consolidated all of my student loans after graduation (may 2014) the credit report read "dispute resolved" on Exp and Trans. Called both CRA's and had the comments removed. (That's where my LO seemed to get annoyed with me)

The "assigned to gov't" is a comment under another student loan. I provided them with proof that this loan is not in default (I was told that "assigned to gov't = default) and that it has been paid off by my student loan consolidator.

They pulled my credit report, once, in early July - during pre-approval process. The loan consolidation finalized shortly after - late July. Is it possible that everything will be more clear, on their end, when they pull my credit report again? LO said they don't pull CR again until closing. LO also told me that by simply removing the comments, my score could significantly decrease (hence, my stress)
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Old 09-09-2014, 05:59 PM
 
3,805 posts, read 9,288,010 times
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I think you're all over it. I think you are fine. Let me know if they balk at anything and we will try to help them understand.

You are a great borrower.
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Old 09-09-2014, 06:11 PM
 
15 posts, read 21,504 times
Reputation: 11
Quote:
Originally Posted by Pfhtex View Post
I think you're all over it. I think you are fine. Let me know if they balk at anything and we will try to help them understand.

You are a great borrower.
Thank you! This has helped to ease my mind tremendously... I'm trying my best.

Thanks everyone!
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Old 09-10-2014, 02:54 PM
 
15 posts, read 21,504 times
Reputation: 11
UPDATE:

"Dispute" Removed and came back today. This did not affect my credit score! I feel like I'm a step closer. I hope to get the "clear to close" by end of next week.

They are waiting for the termite inspection before it can be submitted to the underwriter. the day after signing the contract, I had the inspection done on the home. This inspection report, included a report of "wood damaging" insects. I gave this to my LO and she said she "contacted the listing agent." For the termite inspection? Does this mean that the one I paid for is invalid?
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Old 09-10-2014, 03:04 PM
 
3,805 posts, read 9,288,010 times
Reputation: 4978
Quote:
Originally Posted by CeejHome View Post
UPDATE:

"Dispute" Removed and came back today. This did not affect my credit score! I feel like I'm a step closer. I hope to get the "clear to close" by end of next week.

They are waiting for the termite inspection before it can be submitted to the underwriter. the day after signing the contract, I had the inspection done on the home. This inspection report, included a report of "wood damaging" insects. I gave this to my LO and she said she "contacted the listing agent." For the termite inspection? Does this mean that the one I paid for is invalid?
It means your Loan Officer/Lender SUCKS.

You should be CTC today. Lender seems to be overwhelmed, poorly staffed, poorly skilled, lazy, or is a big-box bank with a huge commissioned sales staff feeding files into an overwhelmed and underpaid Ops division, resulting in bottlenecking that triggers Issues Creation to buy time.
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