Approved but with 9 conditions...is this normal?

[steph140]

I heard from underwriting yesterday...approved for FHA loan but with 9 conditions.  This is a new construction home, and the loan is through the builder, Taylor Morrison.  Most of the conditions I think are rather routine and easy.  These include (1) letter that I don't have any ownership stakes in the company I work for (I'm listed as the COO); (2) updated checking and savings account statements; (3) bank statement that shows that earnest money check cleared; (4) W-2s for 2013; and (5) last 30 days of paystubs. 

One condition was provision of my birth certificate, which I think is weird, but I'm the 2nd, and I never sign anything that way.  Another condition is regarding a loan-payback that my parents made to me--they want documentation that my parents had borrowed money in the first place.  But the condition that I'm concerned about regards a home I short sold in 2009.  The underwriter wants a copy of the settlement statement of that sale "to make sure it meets FHA requirements for a short sale."  What does this mean?

Finally, I am in the process of transferring $10,000 from my IRA to my savings account to help fund the closing costs.  My loan consultant said this was fine, but that the underwriter will then request "full statements" from Vanguard and from the savings account that shows this transfer.  That's all fine and good, but Vanguard only sends out statements every three months.  How do I satisfy their request without a formal quarterly statement?

- Robert

[ezdriver]

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@steph140 wrote:

I heard from underwriting yesterday...approved for FHA loan but with 9 conditions.  This is a new construction home, and the loan is through the builder, Taylor Morrison.  Most of the conditions I think are rather routine and easy.  These include (1) letter that I don't have any ownership stakes in the company I work for (I'm listed as the COO); (2) updated checking and savings account statements; (3) bank statement that shows that earnest money check cleared; (4) W-2s for 2013; and (5) last 30 days of paystubs. 

One condition was provision of my birth certificate, which I think is weird, but I'm the 2nd, and I never sign anything that way.  Another condition is regarding a loan-payback that my parents made to me--they want documentation that my parents had borrowed money in the first place.  But the condition that I'm concerned about regards a home I short sold in 2009.  The underwriter wants a copy of the settlement statement of that sale "to make sure it meets FHA requirements for a short sale."  What does this mean?

Finally, I am in the process of transferring $10,000 from my IRA to my savings account to help fund the closing costs.  My loan consultant said this was fine, but that the underwriter will then request "full statements" from Vanguard and from the savings account that shows this transfer.  That's all fine and good, but Vanguard only sends out statements every three months.  How do I satisfy their request without a formal quarterly statement?

- Robert

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Proof of citizenship/legal residence is normal requirement.

Proof of your parent actually borrowed the money that is now being paid back is normal requirement.

Copy is HUD1 shows all funds being dispersed and to whom. It will show how much the mortgage company received vs what was owed. A normal requirement.

You can print a current Vanguard account status and submit it then followup with the quarterly statement when it is received.

I don't see anything that would be considered an unusual request from the underwriter.

[fot1]

I don't know anything about short sale so can't speak to that.. Everything else looks normal and expected.  When i did the IRA transfer I showed the previous statement and then requested a reciept of the transfer with new balance. It wasn't a full statement but showed enough for my UW

[momofboys]

we have a unique situation. We had a business that slowly went under due to the economy. We put our home on the market and started looking for a new job. We found one 2 hours away from our home and so we had to move. we shortsold our home in 2011. Our personal income did not go down because we used the remainder of the business account to keep current as long as we could. we can prove a 20% decline in the business. Would we qualify for this program?

[StartingOver10]

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@momofboys wrote:

we have a unique situation. We had a business that slowly went under due to the economy. We put our home on the market and started looking for a new job. We found one 2 hours away from our home and so we had to move. we shortsold our home in 2011. Our personal income did not go down because we used the remainder of the business account to keep current as long as we could. we can prove a 20% decline in the business. Would we qualify for this program?

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It looks like you are closing in or have already passed the 3 year date for getting a new mortgage.  What date did your short sale occur?

You can do an FHA loan ith 3.5% down when it has been 3 years from the sale date without having to prove the 20% decline in income.

If you have 20% to put down on the new purchase you can do a conventional loan two years after a short sale. If you have 10% for your down payment you can get a new mortgage after 4 years.