Dallas and Shane Help! Ready to close, now this!!!

[MichiganMommy]

Everything that can be thrown at me in the book has come my way... I was expecting to get a clear to close today, but now it looks like my loan is not being approved for this particular house....

The appraisal was rushed and came back today...The house is in a subdivision that is not more than 50% complete due to the foreclouse mess...the house is listed as a site condo property and therefore, as my luck would have it, it is NOT FHA approvable!!!

Is there ANY way around this... My LO and Realtor were looking for a loophole due to the fact that the land in the subdivision is not all owned by the same builder. Any experience with this or suggestions. I am sick to my stomach!!! The house is worth 600K and is going for $330. I have been jumping through major hoops and now something I have NO control over.

My scores are (on FICO 570,624,647). My LO is using a lower scoring model for TU and so for him my scores are 570, 587 and 624. ANY chance I could go conventional??? WIth 5% down on a 330K purchase.Everything else is solid, rental history, income, employment, etc. I have about 20K in reserves....

I have SEVERAL medical collections that are not paid. What if I paid them all and he did a rapid rescore. Could this bring my scores up???

The house has to close by next Thursday. I likely only have 48 hours to work this mess out!!!

PLEASE HELP. ANY advise is welcome.

Sad in Michigan--

MM

[Anonymous]

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MichiganMommy wrote:

Everything that can be thrown at me in the book has come my way... I was expecting to get a clear to close today, but now it looks like my loan is not being approved for this particular house....

The appraisal was rushed and came back today...The house is in a subdivision that is not more than 50% complete due to the foreclouse mess...the house is listed as a site condo property and therefore, as my luck would have it, it is NOT FHA approvable!!!

Is there ANY way around this... My LO and Realtor were looking for a loophole due to the fact that the land in the subdivision is not all owned by the same builder. Any experience with this or suggestions. I am sick to my stomach!!! The house is worth 600K and is going for $330. I have been jumping through major hoops and now something I have NO control over.

My scores are (on FICO 570,624,647). My LO is using a lower scoring model for TU and so for him my scores are 570, 587 and 624. ANY chance I could go conventional??? WIth 5% down on a 330K purchase.Everything else is solid, rental history, income, employment, etc. I have about 20K in reserves....

I have SEVERAL medical collections that are not paid. What if I paid them all and he did a rapid rescore. Could this bring my scores up???

The house has to close by next Thursday. I likely only have 48 hours to work this mess out!!!

PLEASE HELP. ANY advise is welcome.

Sad in Michigan--

MM

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MM, I am praying for you girl!  I know how hard you have worked for this

[Anonymous]

Here's an alternative point of view:  This could be a blessing in disguise.  And the house is not worth $600,000.  It's worth what the market will bear, and that looks like $330,000.  What if you buy it for $330,000 and this time next year your house is worth $250,000 -- are you going to walk away from it?  Is the subdivision protected by police?  If the subdivision is half-empty, how often do the police patrol?  What about fire protection?  Are there parks?  Who keeps up the parks?  Have you gone to look at the subdivision at different times of the day and night (say, 7:00 a.m., noon, 5:00 p.m., midnight)?  I would want to make sure there weren't squatters living in the area or that some of the empty houses weren't being used for crack houses or that thieves weren't pulling up to empty homes in the middle of the night stealing plumbing fixtures.  Like I said, this little delay could be a blessing in disguise.  Gives you a chance to pause and re-think your decision.  Maybe read some articles about other areas that have half-empty subdivisions and what happens in those areas after a few months.

However, since you seem hellbent on gettting into a house no matter what the terms or circumstances, good luck.  Your best bet is probably to work with your loan officer and real estate agent -- they are going to be familiar with what's available in your neighborhood.

[Anonymous]

With all due respect, Alternative, I've known MichiganMommy for a while now and if there's something she ain't, it's stupid or careless, ESPECIALLY in regards to her family or finances!

I wouldn't be surprised if she's been stalking the house at all hours of the night (I didn't mean that to sound creepy, BTW). I wouldn't even be surprised if she's had a gazillion appraisers checking it over from stem to stern!

As for the market value, you're spot on. We have homes here selling for $300K that were once $500K+ on the BEACH. And there's of course, no telling how much the foreclosure situation is going to continue to affect those values. But eventually, they WILL even out. My area, alone, has gone through this oodles of times in the past 20 years (spank-you-very-much-condo-developers-from-hell)!!

The last time our economy and credit industry went bust this bad was, AFAIK, back in the '20s. But we DID rebound. America is a nation of fighters! And if you don't believe me, you ought to see the fights down in Filene's Basement when there's a sale!

Anywho, it's broke now, I admit. Shane, I'll bet, will admit. Even Dallas, I'd wager. But it won't be "broke" forever. While we DO need to be careful in what we spend, what we buy, land is still land. And last I checked, there ain't a factory that makes it as well as the Good Lord did!

So, Mommy, you go ahead and keep keepin' on!! I'll not only have my fingers, toes, and eyes crossed for you, but I'll be praying for you, too!!

{{{{Hugs!!}}}}}

[ShanetheMortgageMan]

Ouch, that stinks real bad.  I feel for you.

Well #1, your loan officer should've seen this coming a mile away.  Condominium and FHA = red flag.  The loan officer needs to make sure the condo is going to be acceptable, not wait until the 11th hour to look into it.  Why was the appraisal ordered this late in the ballgame?  Appraisals should be ordered as soon as the home inspection is done and the buyer finds the home condition acceptable in my opinion.  Did you just do the home inspection recently?  If so, why was the closing scheduled to happen so soon after all of this?

#2, until you get your scores to a 680 you won't be able to qualify for 5% down with conventional financing... the loan program it'd be OK for, but PMI companies require 680 minimum credit score to obtain MI coverage in a declining market.  FHA does their own MI so that is why you didn't have any issue with that before.

#3, if you paid the medical collections you'd have to do a pay-for-delete instead of just pay them.  Just paying them would update the date of last activity and potentially drop your credit scores lower.

#4, even if you did get the required scores for PMI, the site condominium might not even pass warrantable guidelines which Fannie Mae & Freddie Mac would require for their programs.  That is something your loan officer could look into since they have all of the required info to make that determination at this point.

This property could very well not even be able to be financed unless it was with the "captive financing" that the builder offers (if this is even a builder you are buying it from), with the captive financing the builder offers, usually a special relationship is made so the lender is OK with the non-warrantable status of the site condos.

[MichiganMommy]

Thank you (Wonderin and Miss 1975) and I do repect where Alternative is coming from, BUT as Wonderin predicted, I have been to this neighborhood SO many times, people probably think I already live there...LOL.

Honestly though, I know things are bad. I know things will be bad, but my family is looking to stay put for at least the next 20 years and I bet we will see it rebound one day!

I am just sick about it, because as many of you know, I have been on this home and community for over a year. You don't know what you don't know though... And I would have not thought to ask this (about whether the property was considered a site condo or not)...Apparently, not all builders go the condo route, but those who did, are being hurt further by not being able to attract quailified FHA buyers (the exact population that this mortgage rehab was meant to help out).... Maybe if nothing else, someone on the FICO forum can learn from my situation!!! I have certainly learned a lot from you all!!! Oh, I hope something can be done though.

I am grabbing at straws, I know, but I appreciate all the prayers that I can get. No one but him can work this one out!

Can't wait for Shane and Dallas to chime in.

MM--

[DallasLoanGuy]

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Alternative wrote:

Here's an alternative point of view:  This could be a blessing in disguise.  And the house is not worth $600,000.  It's worth what the market will bear, and that looks like $330,000.  What if you buy it for $330,000 and this time next year your house is worth $250,000 -- are you going to walk away from it?  Is the subdivision protected by police?  If the subdivision is half-empty, how often do the police patrol?  What about fire protection?  Are there parks?  Who keeps up the parks?  Have you gone to look at the subdivision at different times of the day and night (say, 7:00 a.m., noon, 5:00 p.m., midnight)?  I would want to make sure there weren't squatters living in the area or that some of the empty houses weren't being used for crack houses or that thieves weren't pulling up to empty homes in the middle of the night stealing plumbing fixtures.  Like I said, this little delay could be a blessing in disguise.  Gives you a chance to pause and re-think your decision.  Maybe read some articles about other areas that have half-empty subdivisions and what happens in those areas after a few months.

However, since you seem hellbent on gettting into a house no matter what the terms or circumstances, good luck.  Your best bet is probably to work with your loan officer and real estate agent -- they are going to be familiar with what's available in your neighborhood.

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This is not the Dave Ramsey forums.... please update your bookmarks.

[DallasLoanGuy]

MM

Have they looked into a 'Spot Approval'?

Do they know what it is?

[ShanetheMortgageMan]

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DallasLoanGuy wrote:

MM

Have they looked into a 'Spot Approval'?

Do they know what it is?

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According to my checklist for spot approvals 90% of the total units must be sold or under contract, at least 51% of the total units have to be owner occupied, The project, including the common elements, and those of any Master Association, are complete, and the project is not subject to additional phasing or annexation, and of course the 10%/20% FHA saturation rule too.  It's worth a shot looking into though.

[MichiganMommy]

Quoting Shane:

Ouch, that stinks real bad.  I feel for you.

Well #1, your loan officer should've seen this coming a mile away.  Condominium and FHA = red flag.  The loan officer needs to make sure the condo is going to be acceptable, not wait until the 11th hour to look into it.  Why was the appraisal ordered this late in the ballgame?  Appraisals should be ordered as soon as the home inspection is done and the buyer finds the home condition acceptable in my opinion.  Did you just do the home inspection recently?  If so, why was the closing scheduled to happen so soon after all of this? Shane, this all happened really fast. The apprasial was done last week and came back today. The house must close by August 7 unless it becomes bank owned.

Dallas, NO, I don't know what a Spot Approval is, please share!