Do you think it's possible?

Dhavrin · Joined: 04 Oct 2005 Posts: 39

Hi all, I'm new here.

I am waiting to hear back from a broker at the moment, but I am starting to worry.

I have the contract in my hand for a property that my wife and I put an offer on 2 days ago, it was accepted. I have not signed the contract yet.

Here's the hold up... the mortgage may not go through.
The borker is submitting it to a few lenders, but I don't think anyone wants to take me on as a client.

I make 40k @ year.
My wife makes 20k @ year.

We are in NJ and so is the house we want to purchase.

Bankruptcy, Chapter 13, discharged 3/2002
No money down, not much in reserve (anything in reserve will be depleted by the good faith deposit and inspection fees.)
Last years (2004) work was rough, I worked the first 4 months for a company I was with for 12 years. Then I went out disability and collected through 7/04. Then I worked for a different company for 3 months to satisfy a no-compete clause before coming to my current employer (direct competition with the old employer of 12 years).
My wife was off the books, so has nothing to show until 11/04 when she started her current job, we can show all pay stubs from this year for her and Nov/Dec last years W2.

Our credit scored are in the (Mine) 630 range for mid, and (hers) 680 range for mid.

Purchase price is 137,500.00 with seller to give us 5,000 towards closing costs (which should cover it).

We've been current on rent (800 per month) for 8 years, same location for all 8 years.

Our DTI ratio is 42% but will soon drop off into the 38 range (we have 5 months left on one of our car loans).

Does this seem impossible?

Thank you in advance for any advice/help

Dhavrin · Joined: 04 Oct 2005 Posts: 39

For the record, this is what the plan looks like so far.
I don't know if this seems reasonable or not. Everybody else I checked with is very slow getting any numbers together for me, and this is all moving very quickly.

1 Loan for $110,000 & a Second loan for $27,500

1st mortgage / 30 year loan fixed for 3 years @ 8.25%- $1331.21

2nd Mortgage / 30 year loan fixed @ 11.65% - $275.48

Monthly Property Taxes - $247.42

Insurance - $40

TOTAL Monthly Payment - $1,389.29

Dhavrin · Joined: 04 Oct 2005 Posts: 39

Whoa... I just copied and pasted those numbers from the email from my LO.
Now that I look at them, his calculator must be broken :|

RyanGreg · Joined: 04 Oct 2005 Posts: 2

One of the programs that pops into my mind is the Alt-A No Doc Loan. Its the perfect loan for someone in your situation because income and employment does not need to be verified. However, I dont know what the requirement is on the bk because I do not have the matrix in front of me.

I would for a nationwide mortgage company. Let me see if I have an agent available in NJ and see what we can come up with.

Dhavrin · Joined: 04 Oct 2005 Posts: 39

Thank you. I truly appreciate it.

I know we have a lot going against us, the bankruptcy only 3 years since discharge, the lack of my wife's work history (provable at least) and the zero money down.

The above numbers came from an email recommending going No Doc, which is why we are getting such high rates. (The total payment in the estimate is correct, although the first mortgage number is way off).

I am really nervous about the ARM. Being new to this, I fear not being able to be refinanced in time and the index soaring.
My gut is telling me to do this and get into the market now, but my brain is telling me to fear all of this new terminology that I am hearing ;)

My wife however, wants this house more than anything.

Also, I just got word that my income may be going up 400.00 per month as of tomorrow, I have not confirmed this though.

We can easily make that mortgage payment right now, and it's only getting better. I have a car payment ending in 5 months and that's 400.00 there as well.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

I know that our no-doc loan would require at least 5% down (I think at that credit score likely more) and 4 years on the BK. From the sounds of it you might consider an emerging markets. Only requires 620 for 100%. However it's going to have a bit more scrutiny on your overall scenario.

Did your wife work before she started late last year? was she in school? Was the disability work related? It might be easy enough to draw some lines between your original employment and where are at now with a good letter of explanation.

Dhavrin · Joined: 04 Oct 2005 Posts: 39

Well, that was a bit ugly :|

I recieved an updated gfe yesterday, was told this thing was a done deal and that the bank rep came in and reviewed everything and said it's good to go and to send it to underwriting. I paid a 475.00 fee to the LO and the 1000.00 deposit to the realtor and went to bed feeling pretty good.

This morning I was told that the underwriter wouldn't do the deal and my only other option is a new plan with a balloon second, requiring things that I can not provide (not part of the original plan).

So that's that. I feel like they probably knew this up front... but then again i am just sad that i am out the money. I wish when someone like me came along, they would just say "no way" up front, instead of saying "No problem, it's a done deal" and then charging money only to say less than 24 hours later "that didn't work, but here's plan B which we know you can't really do, since you already told us your situation!"

:(

I feel like such a failure.

Thanks everyone for the advice.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Did you ask for your money back? Did you ask what the $475 was for? That's BS, and you'd best get a letter from them that says you're denied and why.

Dhav if you wanna fax your GFE to me and tell me your credit, I can at least help you make some sense of what's going on there. I have some time available tomorrow between 12-4 central time. I am always skeptical of the people in our industry and it sounds to me like you just got taken for a ride...

(Edit) Oh and if they give you a denial letter then it is (at least locally here where I'm at) usually possible to get at least your earnest money back if you are not able to purchase the property through other means. It may be different where you are at.

Dhavrin · Joined: 04 Oct 2005 Posts: 39

Thank you Haplo

This forum is great!

I went into this understanding my chances were slim. We settled into our new jobs now but that's only been for about 11 months each. We both started these jobs last November. Before that I had many years with another company, same line of work. I had a 3 month disability last year, which lead to some issues at work and I left that job. I was immediately offered a position by a direct competitor, but I had to satisfy a "no compete" clause. So I worked for another industry (still sales though) for 3 months exactly to the day, and then was brought onboard by my current employer in 11/04.

With all of that mess, topped by scores in the mid 600's and a bankruptcy discharged in 2002, no money to put down, etc... I knew my chances were slim.

But then this guy said he could do it, so we found a house and mad ethe offer. I was in touch with this LO every step of the way and he never doubted this. Yesterday he wanted his 475.00 and they needed the 1000.00 good faith deposit (which was going to be used to cover some of the closing costs). The LO and REA are from the same company.

The 475 was for Application fee (200.00) and Appraisal fee (275.00)
I figured I'd get at least some of it back since this went nowhere and no application was ever drawn up and no appraisal happened.
I will be speaking to the LO tomorrow (Friday) morning when he gets in to see about getting the money back.

Anyway, I explained to him prior to giving him my CC# that I have just enough to cover the Lawyer (700.00), the 1000.00 deposit, his 475.00 fee and the home inspection. So I asked him how certain he was this would go through, since I wouldn't have any more money to re-apply somewhere else. His exact words were "I had the bank rep come in today, he reviewed everything and said it will go through fine. I sent a new GFE reflecting the changes the bank rep recommended"

So I took a look at the GFE, it looked ok and I gave him my CC#.
Today I get word that it never made it past underwriting, but he has a new plan. The new plan changed a bit and is now a balloon second mortgage with a 12.6 rate, which I would still do but now he is saying he needs me to show 12 months rent checks (currently renting in same place for 8 years) but I can NOT have been late on any of these. Well, we were late on 11/04, 12/04 and 1/05 due to playing catch up still from the set back during disability. Novembers was paid 20 days late, Decembers was paid partially in December and January we paid all everything including January's rent via money order (which I have the reciept), including late fees and legal fees. Our landlord set us on this plan, there was never an issue really at the time.

So that blows this last option out of the water, and now I think that because I couldn't provide that, that's why they might be keeping the money. But at the time I paid the money, he said he had everything he needed, they'd be calling to confirm employment and that it was a done deal.

I have another LO (friends father) looking at this tomorrow, he thinks he may be able to get it pushed through, he knows the whole situation with our past. He's just going to take a look at it before we cancel the deal on the house.

What bothers me is this. They took the 475.00 with one deal in mind, and then totally switched the deal on me when they couldn't get the "done deal" deal to go through. They have my thousand, their lawyer (yep, I've never met him, he was assigned by the REA too) told me today on the phone that his fee is 700 (we were told 400 by the agent), and I think he'll want his money too since this went into attorny review this morning.

The total mortgage payment (all taxes etc...) is 12 dollars less a month with this new offer, but it's a totally different program and what they need me to show them is totally different too. Had he told me any of this up front, I would have explained that I couldn't show the last 12 months rent without showing any late months.

I have no problem paying him something for his time, but I don't think it should be the full 475.00 for what was essentially an hour or two period and an oversight on the LO or bank reps part.
And I don't think I should lose my deposit on the house due to the fact that I can't meet the needs of a never discussed plan now. I met all of his requirements for the original outlined loan program.

Hopefully my friends dad can get me pushed through, he's been doing this for almost 40 years and has some strong connections with banks and underwriters.

I'll gladly send you the GFE Haplo. I would so appreciate even a glance at it to see if any of this makes sense to anyone.

I'd like to say just one last time, that I have no problem with being declined. I fully understand that I am viewed as a risk and nobody knows my current relationship with my boss except for me. I just don't like being told it's a done deal, collect the money, then wooops! we were wrong, but here's plan B, when plan B is quite different from plan A, and there's no way I can swing plan B.

Thanks again for taking the time to read about my situation.

Dhavrin · Joined: 04 Oct 2005 Posts: 39

Quote: (Edit) Oh and if they give you a denial letter then it is (at least locally here where I'm at) usually possible to get at least your earnest money back if you are not able to purchase the property through other means. It may be different where you are at.

That's definitely the case here too, and that is in the contract.
I think that they are trying to say that they offered me a reasonable "plan B" and I failed to meet it's requirements.

He basically told me this today and then went home, but he emailed me plan B first. So I have not been able to get a hold of him since then. I'll definitely post the outcome of tomorrow mornings phone conversation.

chow · Posted: Fri Oct 07, 2005 4:12 pm Post subject:

Call his boss! If he is the boss, go to your states website and contact the department of financial affairs, the secretary of state, or the attorney general. They may even have information about this situation on the website.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Quote: But then this guy said he could do it, so we found a house and mad ethe offer.
#1 thing that irks me about people in this industry is that 'everyone' can do 'everything' because they certainly have a lender who will do it.

Quote: So I asked him how certain he was this would go through, since I wouldn't have any more money to re-apply somewhere else. His exact words were "I had the bank rep come in today, he reviewed everything and said it will go through fine
#1 thing that irks me about account reps. Thier company can of course do everything and it's not thier fault if your borrower doesn't qualify. They have to say 'yes' no matter what so that the broker doesn't go to another lender who will say 'yes' to anything as well.

Quote: So that blows this last option out of the water, and now I think that because I couldn't provide that, that's why they might be keeping the money

This is incorrect. They are denying the loan, you are not withdrawing the loan. It is his job to know, based off your profile, the standard information that is going to be required for each file to each lender. 12 months of cancelled checks for rent is pretty standard, and if he didn't collect that from you in the beginning, well he's sounding like a newby every minute I read further. If you are not able to provide 12 months w/ no lates then they have to either come up with an alternative or deny the loan. Simple as that.

You may be able to get by with a verification of rent if your landlord is not a private owner. Depending on the agreements made, you may not actually show '30 days late' according to their arrangements, and as such you may be alright. Sometimes you can use a VoR from a private individual, but most of the time it has to be property management.

Quote: I have another LO (friends father) looking at this tomorrow, he thinks he may be able to get it pushed through, he knows the whole situation with our past. He's just going to take a look at it before we cancel the deal on the house.

I don't disagree. While it's not an easy situation, I definitely believe there is a way to work this out. Without having credit report and financials in front of me I can't say for sure about the emerging markets program I mentioned earlier, but I certainly think it would be worth giving a shot at.

Quote: What bothers me is this. They took the 475.00 with one deal in mind, and then totally switched the deal on me when they couldn't get the "done deal" deal to go through. They have my thousand, their lawyer (yep, I've never met him, he was assigned by the REA too) told me today on the phone that his fee is 700 (we were told 400 by the agent), and I think he'll want his money too since this went into attorny review this morning.

Did you sign anything that says you will pay for this? Who requested the attorney? Guess what, they're responsible for paying the attorney if the attorney did any work.

Quote: Had he told me any of this up front, I would have explained that I couldn't show the last 12 months rent without showing any late months.
Asking about rental history and/or mortgage history is a standard for all loans, period. If for no other reason than as piece of mind for us as an individual that you're going to pay your mortgage. Depending on the type of broker/banker you go to, some of us could get some heat from our investers and higher ups if our loans start coming back and they're all going FC. If those loans have any issues with them at all, the originating company may find themselves with a bought back loan, and that can be costly.

Quote: I have no problem paying him something for his time, but I don't think it should be the full 475.00 for what was essentially an hour or two period and an oversight on the LO or bank reps part.

I would! This LO lied to you. He flat out told you that of course he could do a loan, my bank rep here says so! You gave him money in good faith that he wasn't blowing smoke up your tutu, and now he's changed his mind. I wouldn't pay him a dime for his time.

The bottom line is that you as a consumer should be treated with a certain amount of respect. This individual and agent didn't provide that to you in any way from the sounds of it. I would be livid if I was working with them! They sound honestly much like the first company that I worked for (hence, why I'm not there any more!) and it drives me up the wall because these are the exact type of situations that give the rest of us professionals a bad name.

Hey, and you know I'm a professional because I have cool sunglasses!!! (Had to add a little bit of comic relief into that long winded boring post ;))

I'll send you a PM with my fax # in a few minutes.

chow · Posted: Fri Oct 07, 2005 6:06 pm Post subject:

Not all "Brokers" are bad people. 8) (just had to remind Haplo that even Auntie Guido-the hard money commercial Broker here- knows when not to push any buttons!) The only fee's I can keep in my state are commercial loan application funds-and I don't even ask for them until I have secured financing and have an approval letter from the lender, and I give the customer a copy of that, along with a Good Faith Estimate of the closing costs. This isn't even required on commercial loans-but I do it anyway, just to show people what the closing will cost! I hate a surprise at the closing table!

Sir, you're getting screwed by that lawyer. He may have a legal right to charge it-but an abstractor did the majority of the work-not him! If he doesn't use a 3rd party-arms lenght abstactor, he's not a good lawyer! That's the cost of doing business, and you didn't order the abstract search-the LO did.

Besides, Haplo and I were just on the phone, and if you secure a mortgage with another lender-they can still use that attorney. I would suggest "he just keeps his horse in the stable" while you go speak with another LO. (which you intend to do anyway! )

I wouldn't let these people intimidate you. That just ain't right. We all lose loans everyday for one reason or another, but you give the money back. It's good PR! It's good karma! Even when I have a right to keep money-I don't.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

D sent me the GFE, and from what I'm seeing the only thing he *might* not get back is $199 for the application fee. The $275 listed for the appraisal, well, is his. Unless there was an appraisal done, which from the sounds of it I *highly* doubt.

Also, I don't see any YSP disclosure on here at all. Considering the scores, 8.25 when it's not on a fixed loan, well you guys tell me but that sounds like someone fattening up the cow, especially at 80%!!

chow · Posted: Fri Oct 07, 2005 6:37 pm Post subject:

he has to have the GFE and the TIL mailed to him within 3 business days of application-credit pull. There is no way around this. What is the date on the GFE, and what date did he disclose his application over the phone or internet? (even on an ionternet deal-the date stamp would be on the pring out of the email-so then you look at the date of credit pull.)

Now I'm going to educate the teeming millions here on something that I bet Mr Sly Broker boker, My sleasy relitter, and Slick Willy's half baked cousin lawyer-never even thought about.

When a consumer pulls credit to look at his own file: It also gives the consumer a date of inquiry of everyone who has done any type of marketing pulls, credit pulls, or skip tracing peeks. If the consumer happens to work for a company that uses the credit systems-the reps, or sales people for that company can and will-assist the employees of that company in full blown credit pulls. they will sit down and go over everything in person with you. ( I know, because I do it on occassion in my little investigative-advice world) the online reports which anyone can get once a year are pretty good-but don't bother with the scores. don't pay for them. We all use different models in the credit world for cars, boats, charge cards and loans. None of the scores ever match up.

What you are looking for is when this chump Loan Officer-pulled your credit. If he pulled your credit on a Monday, then he had better have a document dated by Thursday, in the mail-on Thursday! Meaning he has to print and mail in 3 business days! Otherwise....Please explain to those nice people at RESPA and HUD why you are out of a nationwide compliance program.

Golly, all of this is going to make me create another cartoon 8)

and I guess my arm and wrist is getting tired-because I can't type very well anymore! If you need some help or contact information that will get your money back. PM me. IF i don't know someone, I know someone who knows someone-who can lite a fire for you. Personally, there are times when a transactiona goes wacky and people need to get paid. But in this case-I would be the Squeeky Wheel, and I would even ask for some extra grease! :wink:

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