Is there any hope for us? Please help if you can

mrs4dtough · Joined: 14 Oct 2005 Posts: 9

Hello,

I am hoping someone can help me. My husband & I have taken out a construction loan for $58000. It was due in August but due to many factors we needed to request an extension. we are now due to pay off the loan on Nov. 4th. Our house is very close to being finshed & will be finished by that date. The amount of equity in our home is very high, we owe $58000 on a $150000 home but here's the problem. My husband is self employed & his credit score is below 600, we've called several lenders & brokers and everyone says that they can't do this type of loan w/ a score that low. We can't prove his income. I do not work. Last summer, we were referred to a mortgage company that does private financing. I am afraid that they will want to foreclose on us & we are going to lose our home. We also have a tax lien that we would like to pay off w/ loan proceeds, from a business deal gone wrong in 2003. It is $8000.

Is there anything that I can do or are we definetely just going to lose our home? I am desperate & will accept anything just to protect my investment. Hard money is fine, high interest too just need to save my home.

I am located in Maine. My husbands scores were 600, 553, 483 (not sure why that one is so low)
Thank you

dsickler · Posted: Fri Oct 14, 2005 8:58 pm Post subject:

Hi,

I walked this scenario into my processors office just right now, and she called a lender that is willing to do it. We just have a couple of questions:

1. Are there any other collections on the credit report? because those might need to be paid off in addition to the tax lien?

2. How long has he been self-employed, and what line of work is he in?

3. Are there any mortgage lates in the past 12 months?

My branch is licensed in 14 states, but Maine is not one of them, so I just called our corporate office to see what I will take for me to get licensed in Maine so that we can do this loan for you. The lender we have has done some of these loans for us in the past, and they have already given me the ok to go up to 80% loan to value granted that there are no mortgage lates in the past 12 months. Not sure what your rate will be, and it will be a bit high, but at least we can save the home now, and refi into a better loan program later. So if you can answer those three questions for me I can give you an answer as to whether or not I can do the loan.

thanks.

David

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

My question to you is, what is different now that makes it so that you are not qualified for your construction / end loan, than when you started? That tax lien should have come up a while ago and unless he just became self employed, that should have been an issue at the get-go as well.

pamortgageman · Joined: 21 Jul 2005 Posts: 31 Location: Pennsylvania

I was wondering the same thing Haplo. How did your construction lender approach the tax lien situation? That should have been paid before anything was done at all, with respects to the construction of your new home.

Out of curiosity, did the builder arrange the financing for the construction loan?

mrs4dtough · Joined: 14 Oct 2005 Posts: 9

I just pulled my husbands credit reports from Equifax & Experian, Transunion is mailing one, here is what it has:

There are 4 collections in total: 2 of the 4 are for the same account, same number etc, so I have disputed it as it is duplicated information. So really there are only 3, totaling less than $500, they are old from over 5 yrs ago.

My husband has been self employed for 4 years, he is a general contractor.

We have never missed a mortgage payment but since it is through a mortgage company that uses private money it is not on our credit reports. So we haven't got any credit for paying on time.

As far as, what has changed... nothing has, other than the tax lien. We went to a mortgage broker, he told us he could get us this short term interest only loan & that when we went back to see him in a year, he could get us a mortgage. Now, 15 months later, he can't help us. The tax lien was placed on the property in October 2004 (although the debt originates from 2003) & does show up on credit reports so maybe that it what is dragging our scores so low.

The Mortgage Co. I am using right now only specializes in short term financing 6months - 1year, so we can not do anything with them as our time is up soon.

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

Quote: We can't prove his income

Please explain this statement. Why can't you prove his income if he has been self employed for 4 years? The tax lien is showing up now but it wasn't when you originally applied for the loan? is this correct?

The bottom line is that yes there is someone out there who will help you if you have that much equity. You are pretty much going to have to pay that tax lien off regardless. Do you know someone that could buy the house from/for you? Perhaps that would be a better option than to lose it altogether.

Unless you'd want to fax over a lot of documentation to review (which I'd be happy to do, and give you my opinion. It's fairly unlikely I could help you with my company but I may know someone who could) your best bet would be to collect all your documentation and start calling around and looking for a serious broker that's not just a 'yes man' type, and go in and sit down with them and go over it. Easiest way to tell a 'yes man' type in your scenario? If he says 'I can definitely do that" you've got the wrong man. You actually want to talk to the guy that's going to tell you 'Gosh, that's going to be pretty tough. Let me go over the documentation with you and give me a day to really discuss it with my lenders.' Because no, you don't have an easy scenario, and most lenders are not going to be all that interested in taking it up.

Good luck, if you want some more assistance from me personally send me a PM and i'll get you my fax number and we can talk.

mrs4dtough · Joined: 14 Oct 2005 Posts: 9

I have tax returns, of course, but unfortunately, they are not very favorable. 2003 returns, we took a huge loss on, due to my business going under, it dragged our combined income low. Also, that's where my tax lien comes from. 2004 shows about $35,000 before deductions, but because of some lg purchases (tools & equip.), drops our adjusted income to $12,000. Was told by my first mortgage broker that with income like this, we would need to do stated income only & that our scores are too low to do that.

The lien was placed by the state of maine in late 2004, after we had the construction loan in place.

Also, we never had a mortgage secured for after the construction loan, The broker just told us to come back to see him when the house was complete & that he could get us a mortgage.

mrs4dtough · Joined: 14 Oct 2005 Posts: 9

Also: I don't know if this matters but tax returns from 2002 & 2001 are very favorable. Can we use these to show that my husbands business is indeed profitable?

pamortgageman · Joined: 21 Jul 2005 Posts: 31 Location: Pennsylvania

One option that may work, if your business OR personal bank statements show strong average deposits, you may be able to go with a bank statement program that is treated as a full documentation loan.

I believe that the tax lien would need to be paid before closing. Unless you can find a lender that will treat this as a refi.

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

Quote: Also, we never had a mortgage secured for after the construction loan,

Bad bad bad!!! Your mortgage broker, for lack of a better term, is an idiot. Your construction lender is probably an idiot too, but only because they didn't make sure that there was financing for you at the end.

Your tax returns from 01 and 02 aren't really going to help. It doesn't matter what you used to make, it's wha tyou do now.

mrs4dtough · Joined: 14 Oct 2005 Posts: 9

Quote: It doesn't matter what you used to make, it's what you do now.

Is there anyway to show a what my husband has made in 2005? He has been fairly successful this year. Also, I can provide bank statements but they are from a joint account between my husband & his brother. Does that matter? I have discussed a bank statement loan with several brokers but no one has been able to make that work for us either with my husband's scores so low.

Also, I have met with several local brokers, and banks & have been turned down by all. Most just refer me back to the company that I have my loan through but they can't help since they only do short term financing & don't do mortgages. Besides, they have been very difficult to work with & I really need to get clear of them. We were given a loan through them based on equity not credit.

If I had time, I would just sell my home but I don't. Houses take awhile to sell in my area, the average according to my Real Estate Agent is 290 days.

As far as the tax lien goes, I can't pay it off. Our savings are low as we have been putting most of it into this house & have been for the last few years. I am not sure how likely the State of Maine would be to work something out with me to pay it since I have already done everything asked of me to prevent the lien in the first place and was still given it. (Even paying $1800 on it the month before they took us to court)

I came here as a last resort to seek your advice & I appreciate all the help. Thank you very much

Haplo · Joined: 20 Jan 2005 Posts: 2406 Location: Springfield, IL

Call me tomorrow at my 800# and we'll talk.

chow · Posted: Mon Oct 17, 2005 10:54 am Post subject:

Haplo, are you guys signed up with Eastern Savings Bank, or any other assett based lender on your subprime side? They might do a hard money first if she has an agreement for the taxes to stay in second. (ma'am) since this is a judgement, the interest is still accumulating at the court- the longer you wait to pay these, the higher the bill will be-maybe you need to work out a payment plan?)

I have to do my "day of community service" for the National Exchange club today-almost all day, from 7am to 9pm. Leave me an email if you need to send her somewhere. (or look up Becca!!!!)

mrs4dtough · Joined: 14 Oct 2005 Posts: 9

Thanks! I will be in touch.

A couple of questions though....

How do I go about getting the state to agree to be 2nd? Do I need a lawyer or is this something I can arrange myself?

Also, I have heard from a few brokers that only 2of3 bureaus are reporting to them? Why is this? I am able to get scores from all 3.

mrs4dtough · Joined: 14 Oct 2005 Posts: 9

Quote: maybe you need to work out a payment plan?)

I have done this but they add so many fees & interest to it each month that it is virtually impossible to get ahead

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