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.
Hi all, I am extremely frustrated right now so I apologize if my grammar is terrible or if any of this comes off wrong. We are all set(so I thought) to close on a home next Monday, the paperwork has been complete for weeks and I have provided everything asked. Nothing left but to close. Today I receive a call from my loan officer at Navy Federal Credit Union stating there is a problem. They were doing the final review for "clear to close" and found a supposed issue with my employment. Funny, nobody caught this a month ago? Today I was told multiple people reviewed my file over the past month, but this issue was overlooked until today. Sounds like major incompetence.
Now, I have been extremely transparent about my employment status the entire time. I was a Government civilian, I relocated and became a Government contractor. I did not have a lapse in employment, in fact I was dual employed during the weeks I applied for this loan. My current contract is for 6 months and then I move into a staff position doing the exact same job. Accepting this position resulted in a 25% increase in compensation. NFCU states that they are uncertain about my future career situation. I have never had a lapse in employment, work in IT security(I don't know any unemployed cybersecurity professionals), in my mid 20's and make over 6 figures in an area with a low cost of living and receive a monthly % from the VA that is enough to cover my mortgage. I purchased a home in 2015 and financed with NFCU, never missed a payment and then sold the home a month ago and paid off the loan in full. Solid credit score, zero debt aside from a $300 car payment, enough liquid in savings to pay the mortgage for several years if I quit working tomorrow. I'm not stating this to boast, just laying out the facts that I would think make me a solid home loan candidate. None of it seems to matter to Navy Federal, they think I'll be out on the streets in 5 months.
I asked for the policy in writing that highlights why they cannot honor our loan. They said it's a VA loan policy regarding income, I have not received the policy from them as requested though I did find the policy online. Some highlights from Chapter 4 of VA pamphlet 26-7, Credit Underwriting:
"VA loans involve a veteran’s benefit. Therefore, lenders are encouraged to make VA loans to all qualified veterans who apply."
"Income analysis is not an exact science. It requires the lender to underwrite each loan on a case-by-case basis, using: judgment, common sense, and flexibility, when warranted."
"Generally, employment less than 12 months is not considered stable and reliable. However, it may be considered stable and reliable if the individual facts warrant such a conclusion. Carefully consider the employer’s evaluation of the probability of continued employment, if provided."
There are many more that seem to favor the veteran. Surprisingly for a VA document it was actually written with common sense in mind.
For those of you with more knowledge on this process or anyone with ideas, what do you recommend I do? I have already requested a conference with all involved at NFCU so that we can go over the Underwriting document noted above, line by line. To me this is absolutely unacceptable, the sellers are probably packing their belongings this very minute as they are expected to move 5 states away next Monday. They have family driving 2000+ miles to help with the move, they've probably already made it here. I have family coming from out of state to help us move, our belongings are scheduled to be delivered on Monday. I have an apartment lease running out and a newborn and spouse that I have to ensure are not homeless now due to Navy Federal's major incompetence. Not looking for sympathy, just stating what's riding on this deal. As you all know there are a lot of moving pieces and life changing moments that come with buying/selling a home, for a company to just say "whoops, our bad" a freaking week before closing is inexcusable.
Last edited by question009; 05-01-2017 at 07:29 PM..
Can you get verification from your employer that you will move into a staff position in 6 months? Is it part of the normal process that one is first a contractor and then becomes an employee?
I don't have any real answers for you, just doing a little brainstorming. Sorry this is happening to you.
Thanks for the reply rrah, I plan on requesting this verification tomorrow morning and do not think it will be an issue to get, just when I get it may be the issue. I could probably request to move into the staff position right away since things are going really well with the new position, but doubt that process can be complete by the end of this week. And yeah, it's pretty normal to do a temp contract and then move into a staff position as long as you're performing and clicking with everyone.
Contractor positions are never seen as solid employment unless you have been there for over a year, especially if you have gone from the most "stable" job possible, which is a career tenure civil servant. You picked a lender with a unique knowledge of the difference between a fed and a contractor as they lend to military and civil servants quite a bit. I doubt you would have had the same issue with another lender. People leave federal employment for more money all the time, but there are definite advantages to staying in those roles.
I am sorry this is happening. Its very stressful I am sure. But I have heard similar stories from people who have gone to contractor jobs from federal positions. One friend was told (by NFCU) that they don't count your job as "stable" until you have been there at least 12 mos, and much like you, her loan was nixed at the last minute. I am sure you will need some verification from your employer that a permanent job is on the table.
Unfortunately NFCU is known for being pretty conservative & unfortunately VA does leave it up to the underwriter to decide whether or not the income is stable. I highly recommend that you start looking for another lender right away. One of the great things about VA is they make it very easy to transfer the LIN# & appraisal.
Hi all, I am extremely frustrated right now so I apologize if my grammar is terrible or if any of this comes off wrong. We are all set(so I thought) to close on a home next Monday, the paperwork has been complete for weeks and I have provided everything asked. Nothing left but to close. Today I receive a call from my loan officer at Navy Federal Credit Union stating there is a problem. They were doing the final review for "clear to close" and found a supposed issue with my employment. Funny, nobody caught this a month ago? Today I was told multiple people reviewed my file over the past month, but this issue was overlooked until today. Sounds like major incompetence.
Now, I have been extremely transparent about my employment status the entire time. I was a Government civilian, I relocated and became a Government contractor. I did not have a lapse in employment, in fact I was dual employed during the weeks I applied for this loan. My current contract is for 6 months and then I move into a staff position doing the exact same job. Accepting this position resulted in a 25% increase in compensation.NFCU states that they are uncertain about my future career situation. I have never had a lapse in employment, work in IT security(I don't know any unemployed cybersecurity professionals), in my mid 20's and make over 6 figures in an area with a low cost of living and receive a monthly % from the VA that is enough to cover my mortgage. I purchased a home in 2015 and financed with NFCU, never missed a payment and then sold the home a month ago and paid off the loan in full. Solid credit score, zero debt aside from a $300 car payment, enough liquid in savings to pay the mortgage for several years if I quit working tomorrow. I'm not stating this to boast, just laying out the facts that I would think make me a solid home loan candidate. None of it seems to matter to Navy Federal, they think I'll be out on the streets in 5 months.
I asked for the policy in writing that highlights why they cannot honor our loan. They said it's a VA loan policy regarding income, I have not received the policy from them as requested though I did find the policy online. Some highlights from Chapter 4 of VA pamphlet 26-7, Credit Underwriting:
"VA loans involve a veteran’s benefit. Therefore, lenders are encouraged to make VA loans to all qualified veterans who apply."
"Income analysis is not an exact science. It requires the lender to underwrite each loan on a case-by-case basis, using: judgment, common sense, and flexibility, when warranted."
"Generally, employment less than 12 months is not considered stable and reliable. However, it may be considered stable and reliable if the individual facts warrant such a conclusion. Carefully consider the employer’s evaluation of the probability of continued employment, if provided."
There are many more that seem to favor the veteran. Surprisingly for a VA document it was actually written with common sense in mind.
For those of you with more knowledge on this process or anyone with ideas, what do you recommend I do? I have already requested a conference with all involved at NFCU so that we can go over the Underwriting document noted above, line by line. To me this is absolutely unacceptable, the sellers are probably packing their belongings this very minute as they are expected to move 5 states away next Monday. They have family driving 2000+ miles to help with the move, they've probably already made it here. I have family coming from out of state to help us move, our belongings are scheduled to be delivered on Monday. I have an apartment lease running out and a newborn and spouse that I have to ensure are not homeless now due to Navy Federal's major incompetence. Not looking for sympathy, just stating what's riding on this deal. As you all know there are a lot of moving pieces and life changing moments that come with buying/selling a home, for a company to just say "whoops, our bad" a freaking week before closing is inexcusable.
They seem to be focused solely on the items in bold above. You should politely escalate, and provide enhanced documentation, while concurrently looking into switching lenders and getting an extension. No, that's not impossible, it's something you need to address.
But the whole "Inexcusable," "unacceptable," "line by line," - - this kind of talk is going to get you the opposite of your desired result. Seriously, you have to talk to them with the patience that you have for one of your kids and focus on getting them to do what you want, because you can't force anyone to reconsider things and be on your side if they hate you.
And a conference call with "all involved" and go over anything line by line, well - that's not going to happen.
The central issue seems to be that you are currently a Contract employee, and that this is being strictly interpreted. This is a "your mileage may vary" thing, not just lender to lender, but underwriter to underwriter sometimes.
Do you have a firm offer letter stating that you are moving into the full-time position, and is that a base salary that is 25% higher, or does the position involve bonus, etc., that you have not earned before?
There are Regional Operations Centers for VA - I can't tell much from your profile - is the house you are buying in IL?
[quote=Pfhtex;48023145]They seem to be focused solely on the items in bold above. You should politely escalate, and provide enhanced documentation, while concurrently looking into switching lenders and getting an extension. No, that's not impossible, it's something you need to address.
But the whole "Inexcusable," "unacceptable," "line by line," - - this kind of talk is going to get you the opposite of your desired result. Seriously, you have to talk to them with the patience that you have for one of your kids and focus on getting them to do what you want, because you can't force anyone to reconsider things and be on your side if they hate you.
And a conference call with "all involved" and go over anything line by line, well - that's not going to happen.
The central issue seems to be that you are currently a Contract employee, and that this is being strictly interpreted. This is a "your mileage may vary" thing, not just lender to lender, but underwriter to underwriter sometimes.
/QUOTE]
Great advice, great post.
OP, I fall prey to the "this is unacceptable!" imperiousness myself and absolutely this does not work in a lending situation. Remember that they are giving you a boatload of money. Its up to you to convince them that you are worthy risk.
But really, someone should have told you how your change in employment might affect your loan, long before now.
My husband went from active duty to government contractor and we used a Navy Fed Conventional loan. He was not supposed to start the job until September and we bought the house the previous February with an offer letter from the company. No problems. How big is your down payment? If you are willing to increase the down payment will they be willing to fund the loan?
I appreciate all of the responses and I plan to address them all when time allows. I do live in IL for the poster who asked. And thank you to the post that mentions moving all of the VA work to a new lender, I didn't know that, that will definitely save some time if I go with another lender. NF is making a decision by tomorrow at 12. If they decline I'll be moving to a local lender.
Quick update on my contract: I learned today that this is not a 6 month contract, it's an indefinite contract, there is not a set end date. Should I decide after 6 months of employment that I would prefer to move to the staff position, I can do so. If not, I continue on with my current company and all is well. Most people choose to move to the staff position due to better benefits, so when NFCU reached out to my HR department with the VOE, the HR department, thinking they were being helpful, left a remark about about moving to the main company in a staff position, in 6 months .. that's typically what everyone does, so they threw it in there. Nothing was said about an end date. NFCU interpreted this as my current role ends in 6 months, and they want to see an offer letter for the new role. I explained to them that this was not the case, the HR department sent a revised VOE stating that employment will continue whether I move to the staff position or not. NFCU does not seem satisfied with this as they truly believe, no matter what HR tells them, that I will be unemployed in 6 months. They added this revised VOE to my file anyway and the board will review tomorrow.
I have decided not to pursue the route of obtaining an offer letter for the staff position, as NFCU wants a set dollar amount in the offer letter. When I switch to that company there will be a salary negotiation process, and being that I am only 1 month into the job, the leverage is completely in their corner and asking for an early negotiation is likely going to cost me thousands in annual salary compared to if I wait until the 4-6 month mark where I can negotiate based on months of solid performance. I'm not losing up to $10k in salary per year just to satisfy NF. Also, they would not even guarantee that the offer letter would be sufficient because it has contingencies like passing a drug test, having work related certifications ..they were concerned about these contingencies, that I've obviously already met, because I already work there.
Quote:
Originally Posted by andherewego
My husband went from active duty to government contractor and we used a Navy Fed Conventional loan. He was not supposed to start the job until September and we bought the house the previous February with an offer letter from the company. No problems. How big is your down payment? If you are willing to increase the down payment will they be willing to fund the loan?
It's a VA loan so no down payment, however I offered to move $25k into a NFCU account, basically lock myself out of it, and agree in writing that it will only be used for monthly mortgage automatic withdrawals. This would guarantee that they receive the monthly mortgage amount for at least 2 years, they declined.
Last edited by question009; 05-02-2017 at 07:51 PM..
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.
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.
