U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-08-2008, 12:21 PM
 
Location: High Bridge, NJ
3,858 posts, read 9,249,059 times
Reputation: 3364

Advertisements

My fiancee and I recently had our offer turned down by a seller because his realtor pointed out a clause in Navy Federal's letter that they didn't like. We were approved by NFCU for $260K at a fixed rate for a 30 year 100% finance mortgage. Apparently there is a clause in the mortgage which says that Navy Federal reserves the right, after the appraisal, to deny financing if the property is in what they deem a "red zone," which basically means that it is in an area where there is a glut of homes for sale. I'm assuming that they do this to cover themselves in the event of a default since they do not charge PMI. The fact that Navy Federal does not charge PMI for a 100% finance loan is the main reason we went with them, but if this clause ends up scaring our buyers away, what good are they?

Our realtor also claims that she's never heard of such a thing and thinks its outrageous. I called Navy Federal and they said that it's always been their policy and my mortagage processor said that she's only seen them deny financing on those grounds a handful of times in the past 10 years. What should I do? Some friends of ours bought a home through Navy Federal about a year and a half ago with the same loan (30 year, 100% finance, etc...) and they didn't even know the clause existed-neither the loan officer, nor their realtor, nor the seller's realtor pointed it out to them. Should the realtors be concerned, or are they making something out of nothing here? I'm wondering because from the get go our realtor has been pressuring us to use Wiechert's in house services, which I'm sure she gets a cut of despite what she says.

I'd appreciate any advice...
Rate this post positively Reply With Quote Quick reply to this message

 
Old 01-08-2008, 12:48 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,905,338 times
Reputation: 1008
What you have is a failure to communicate!

Your loan sounds exactly like a VA loan.
VA Loan is always subject to property evaluation.

Sounds like your realtor has NEVER worked with a VA loan.

What does the seller care? As long as they close....and get their money it shouldn't be a problem.

It's just like a borrower being approved for financing at the beginning...then goes on a shopping spree to buy new home items...or buys a new car.
Then the lender repulls their credit right before closing...finds out that they have new debt which makes the borrowers Debt-to-Income ratios higher...ultimately denying the borrower.

Happens all the time.

Quote:
Originally Posted by Badfish740 View Post
My fiancee and I recently had our offer turned down by a seller because his realtor pointed out a clause in Navy Federal's letter that they didn't like. We were approved by NFCU for $260K at a fixed rate for a 30 year 100% finance mortgage. Apparently there is a clause in the mortgage which says that Navy Federal reserves the right, after the appraisal, to deny financing if the property is in what they deem a "red zone," which basically means that it is in an area where there is a glut of homes for sale. I'm assuming that they do this to cover themselves in the event of a default since they do not charge PMI. The fact that Navy Federal does not charge PMI for a 100% finance loan is the main reason we went with them, but if this clause ends up scaring our buyers away, what good are they?

Our realtor also claims that she's never heard of such a thing and thinks its outrageous. I called Navy Federal and they said that it's always been their policy and my mortagage processor said that she's only seen them deny financing on those grounds a handful of times in the past 10 years. What should I do? Some friends of ours bought a home through Navy Federal about a year and a half ago with the same loan (30 year, 100% finance, etc...) and they didn't even know the clause existed-neither the loan officer, nor their realtor, nor the seller's realtor pointed it out to them. Should the realtors be concerned, or are they making something out of nothing here? I'm wondering because from the get go our realtor has been pressuring us to use Wiechert's in house services, which I'm sure she gets a cut of despite what she says.

I'd appreciate any advice...
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-08-2008, 12:56 PM
 
Location: High Bridge, NJ
3,858 posts, read 9,249,059 times
Reputation: 3364
Quote:
Originally Posted by banker0679 View Post
What you have is a failure to communicate! Your loan sounds exactly like a VA loan. VA Loan is always subject to property evaluation.
Hmmm...interesting. We're not applying for a VA loan (I am eligible for membership in Navy Federal through my father's Naval service), but I'm sure they write a lot of them, so they do them all the same?

Quote:
Originally Posted by banker0679 View Post
Sounds like your realtor has NEVER worked with a VA loan.
Probably very likely as well. The area we're looking at is nowhere near any of the large military bases in New Jersey. The seller has since accepted another offer, so we're back to the drawing board. What should I do if confronted with this again by another seller?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-08-2008, 01:03 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,905,338 times
Reputation: 1008
Basically, can be the same requirements. VA have very strict property guidelines. You should be okay with the Navy FCU.

First, dont say nothing to the next seller about it. If they dont spot it then let things be. Also, inform your realtor it's just like a VA loan that is being offered through your Credit Union.

Most realtors, loan officers, appraisers, builders, and sellers shy away from government loans. These loans can take longer, and have more restrictions.

If the seller asks...just mention it's just like a VA loan..and you dont have to be around a military base. There are many veterans who live across the U.S. that are using the same type of loan

Quote:
Originally Posted by Badfish740 View Post
Hmmm...interesting. We're not applying for a VA loan (I am eligible for membership in Navy Federal through my father's Naval service), but I'm sure they write a lot of them, so they do them all the same?



Probably very likely as well. The area we're looking at is nowhere near any of the large military bases in New Jersey. The seller has since accepted another offer, so we're back to the drawing board. What should I do if confronted with this again by another seller?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-08-2008, 01:55 PM
 
Location: High Bridge, NJ
3,858 posts, read 9,249,059 times
Reputation: 3364
Quote:
Originally Posted by banker0679 View Post
Most realtors, loan officers, appraisers, builders, and sellers shy away from government loans. These loans can take longer, and have more restrictions.
Isn't that basically discrimination against someone based on veteran's status? Great country we live in...
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-08-2008, 01:59 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,905,338 times
Reputation: 1008
No it's discriminating the loan guidelines.....

the VA is out to protect itself and dont want to lend on properties that dont meet their guidelines.

Quote:
Originally Posted by Badfish740 View Post
Isn't that basically discrimination against someone based on veteran's status? Great country we live in...
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-08-2008, 02:19 PM
 
Location: High Bridge, NJ
3,858 posts, read 9,249,059 times
Reputation: 3364
Quote:
Originally Posted by banker0679 View Post
the VA is out to protect itself and dont want to lend on properties that dont meet their guidelines.
I get that the VA needs to cover itself so that it doesn't go broke, but what I'm saying is the seller is basically telling us:

"Solely because you're using a VA loan I'm not even going to consider your offer or offer you a counter-offer despite the fact that you clearly have the financial wherewithall to purchase the property. Go jump off a cliff."

If every seller acted in this fashion there would be no VA loans because they would basically be useless.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-08-2008, 02:28 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,905,338 times
Reputation: 1008
I'm doing a VA loan now...and the realtor/builder wanted the borrower go with another lender or product because the said the VA is bad.
too many restrictions...too many problems.

The rate is a lot better...and NO PMI. They didnt care...but my borrower stuck to their guns..and we're having closing in a couple of weeks.

Quote:
Originally Posted by Badfish740 View Post
I get that the VA needs to cover itself so that it doesn't go broke, but what I'm saying is the seller is basically telling us:

"Solely because you're using a VA loan I'm not even going to consider your offer or offer you a counter-offer despite the fact that you clearly have the financial wherewithall to purchase the property. Go jump off a cliff."

If every seller acted in this fashion there would be no VA loans because they would basically be useless.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 05-17-2008, 07:54 AM
 
Location: Florida
21 posts, read 135,559 times
Reputation: 28
Quote:
"Our realtor also claims that she's never heard of such a thing and thinks its outrageous. I called Navy Federal and they said that it's always been their policy and my mortagage processor said that she's only seen them deny financing on those grounds a handful of times in the past 10 years. What should I do? Some friends of ours bought a home through Navy Federal about a year and a half ago with the same loan (30 year, 100% finance, etc...) and they didn't even know the clause existed-neither the loan officer, nor their realtor, nor the seller's realtor pointed it out to them. Should the realtors be concerned, or are they making something out of nothing here? I'm wondering because from the get go our realtor has been pressuring us to use Wiechert's in house services, which I'm sure she gets a cut of despite what she says.

I'd appreciate any advice... "
The clause you are speaking of is becoming more and more common because of our current market. When an appraisal is market as "declining market" and/or "oversupply" a lender worth their salt will take that as a red flag. When we bought our home we went with Navy Federal instead of our other credit union, and we chose the Homebuyer's Choice mortgage because, like you said, they don't charge PMI. They also have a Veteran's Choice and Active Duty Choice that don't charge PMI either. With property values falling it means a lender might have a lien on a property that is worth less than the lien amount.
Navy Federal happens to be one of the few major financial institutions in America that has gone unaffected by the current mortgage crisis. It is the largest credit union in the world, with assest beyond what is required by the NCUA, and the reason for that is responsible lending practices, and strict guidelines used to qualify members for loans. It is posted on their website.
I thought the rates were competetive. I have followed their financial reports and assets, and I have found their customer service some of the best in the industry (having tried many places), and their licensed financial advisors (at least the one in our area) are very good.
Your realtor might not necessarily get a kickback herself from the lender she recommends, but definitely go with whatever program is right for you. 100% financing with no PMI is such a steal, and good 24-hour customer service with a real human being to talk to and a service philosophy where the credit union member comes first is hard to beat, in spite of the carrots a lot of institutions offer that just aren't truly competetive in the long run.
Don't just look at the rate an institution quotes. Also check all of the fees and charges involved with the mortgage, like the origination and funding fees, and keep your eyes open for "junk" fees. We were happy because Navy Federal doesn't charge "junk" fees. The banks we looked at did, and our other credit union even does.
Anyway, that was my thoughts on the matter from our experience. Hope it helps, and good luck home shopping. Make sure to go to Navy Federal and look at the mortgage section for a program called White Fence. We used it to transfer our utilities, and they ended up getting us a deal on our satellite service. We also used Navy Federal's "Realty Plus" service, also, and got $942 cash back after closing on our house, which cost us $157,000. You can use Realty Plus even if you don't get the mortgage through Navy Federal.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 01-20-2010, 12:49 AM
 
Location: Seabrook, New Hampshire
257 posts, read 584,996 times
Reputation: 174
In my case, this was a completely phony offer. After making the agreement with the seller, NFCU called back and said that 100% financing was not available because the home (like every other home in the country) was in a declining market. Bottom line was that, after I had several thousand dollars and a purchase agreement with the sellers, I had to come up with $9,000 for the down payment and my interest rate was higher, to boot.
Try performing a loan mod with NFCU when you lose part of your income. I've been getting the runaround for eight months, and am now having to work with NACA to get something done. If that doesn't work, I'll have to get an attorney.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

© 2005-2022, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top