Dallas or Shane - NSF issue

[darxan3]

I want to thank everyone who responds to my posts/questions - I never seem to have any advice to give and I am always asking questions - so I wanted to say thank you for any responses you make

Okay so here is my latest question - my husband and I were approved through AUS and then we were also approved once the file went to underwriting.  We are having a house built so we won't be settling until October.  We have deposited all of our earnest money and we were just basically waiting for the house to be built.  Our LO told us that she would be collecting new bank statements and paystubs prior to settlement (which was no big deal). 

I wrote a big check for $7500 as part of my earnest money which cleared last week - my husband gets paid this week (tomorrow) - but our bank account was low due to this $7500 check. It was around $100. 

My husband got an $8000 check from his 401K that he was depositing this past saturday.  We had a wedding this weekend and my husband wanted to have extra cash on him for the wedding.  We had $100 in our account before depositing the $8000 check.  The teller at the bank told my husband that $200 of the $8000 check would be available immediately if he deposited it in the ATM machine - so that's what he did.  The ATM stated that we had $300 available...so he took out $250...leaving $50 in the bank as available. 

I checked my account this morning to see if the check cleared (I had no reason to think a 401k check would bounce).  The check was returned and we now have a balance of -$150.  My husband called the bank and they said they noted why it was returned, but that they no longer had the check - it was being mailed back to us.  It seems my brilliant husband forgot to sign the check before depositing it in the ATM machine.  Since it was not signed it could not be deposited - I honestly cannot believe he forgot to sign the check, but it is what it is.

The bank manager said once we get the returned check in the mail we should bring it in and he will help remove the insufficient funds and charges etc. from our statement.  Is that a possibility?  Can the bank change this kind of stuff?  Also my LO said she has to use this statement because it shows my canceled check for earnest funds....

I know there is a strong chance of being turned down for a mortgage for having insufficient funds - if the bank cannot get rid of the NSF stuff on my statement do you think a letter from the bank explaining what happened would be enough to keep us from losing our mortgage...this is just a mess.

[DallasLoanGuy]

Document the returned check...... Maybe a letter from the bank branch.

Should not be a problem.

[Lel]

I bounced my earnest money check in a huge way.  Same reason - funds from my brokerage didn't clear as quickly as expected.  It didn't affect my mortgage approval or closing date in any way.  I was pretty freaked out about it when it happened, but the LO and my realtor weren't fazed at all.  I think the industry knows that people don't have tens of thousands of dollars sitting in their checking account until the day they make an offer, and that there are going to be glitches like this from time to time as people shuttle their money from one location to another.

[darxan3]

Thank you so much for the reply - it makes me feel better to get some other peoples feedback on this - especially yours  My husband just called me - he was in the bank talking to the bank manager and the bank manager said he would write a letter and call people if we needed him to call and explain that it was simple human error and neglectful banking on our part.  He also said it should not be a problem.  This entire process is so incredibly stressful.   

[darxan3]

"I bounced my earnest money check in a huge way.  Same reason - funds from my brokerage didn't clear as quickly as expected.  It didn't affect my mortgage approval or closing date in any way.  I was pretty freaked out about it when it happened, but the LO and my realtor weren't fazed at all.  I think the industry knows that people don't have tens of thousands of dollars sitting in their checking account until the day they make an offer, and that there are going to be glitches like this from time to time as people shuttle their money from one location to another.

BMIs:
3-21-06: 32.2
8-7-07: 30.9
2-15-09: 30.3
4-5-09: 27.8
5-14-09: 26.6"

-Thank you so much for this post - your response makes me feel 100% better....seriously I am a mess - I cannot stand this whole process.

[Anonymous]

Thanks!

I would have been in this same boat only because of where my bank is for my checking account and all my money tied into my CU.  I'm purchasing a new contruction that is totally completed.  Last Saturday I had to put down my earnest money of $5,000 but require you to get Pre-Approved thru their preferred Lender which is great because the builder is buying down the rate to 4.25% 30yr Fixed.  Got Pre-Approved on Tuesday and went down this past Saturday to sign the contract... However, I read this post BEFORE so I asked for my check back and got them a Cashier's Check from my savings.  That way I wouldn't risk the money not getting deposited/registered in time.

I Thank you all for your posts and comments.  Because of MyFico I was Pre-Approved (6months of Credit cleaning) and I too hope that nothing stands in the way of getting fully funded.  It's thru Bank of America so hopefully the LO did her job well and the UW won't find something they don't like about me   The Sales Agent for the Builder said that he has never had anyone not get fully funded if they use their Preferred Lender because they know how much time it takes to write up a contract.  But like Dallas said, anything is possible...

My estimated close date is set for Nov 6th.  Already locked my rate as of this morning!

Message Edited by NewHope on 09-21-2009 09:51 AM

Message Edited by NewHope on 09-21-2009 09:53 AM

[Anonymous]

I think what UWs are more looking for is a pattern of NSF and such.  If you had 4 overdrafts in tha last month because you were "anticipating" some payment or something and went ahead and withdrew money, or if you just were not paying attention to it.

Now, the UW may see an issue with their being only 100 in your account if you are suppossed to be purchaseing next month if there are other costs they are expecting you to pay.  They may want to re-verify how you are going to have any additonal closing costs or down payment money.  It will not be about the NSF, but whether, if your account balance is low, you will have adequate money to close.

Anyways, as long as you have adequate explanation, you are goinh to have adequate verifiable funds to close, and you do not try to hide it from your LO/UW you should be OK.  

[Anonymous]

Michkie08

Thanks so much for your response, no I've had no NSFs.  And I have funds to cover 10% rather than the 3.5% for FHA.  This will be my first home and my middle score is only 654 so I'm just over catious and want to make sure I get fully funded.  I did ask the Sales Agent if there's a reason I wouldn't and he pretty much said what you did.  And don't try to hide anything!  He assured me that if I was Pre-Approved thru their preferred Lender I am 99.9999% OK to close.  I'm trying to stay POSITIVE!