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Denied Desktop Underwriter with good credit, income, etc

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Anonymous
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Denied Desktop Underwriter with good credit, income, etc

UPDATE: My credit union was able to approve my mortgage without any issues. I got a great rate for a conventional loan with zero issues. No idea if the other lender was messing something up but I'm glad it was resolved.

 

My lender just called to tell me I was denied in Automated Underwriting. We were all surprised. I have good credit ( 699EX 706EQ 751TU), good income (46k), and a stable job history (3.5 years with the same company).

 

I have very low DTI. I have 2 student loans with a total payment of $75 and a remaining balance of $2500. My auto insurance is $39/month. These are my only debts. I have an accepted offer on a condo for $169k. Monthly HOA is $190. I am using a government grant + my own funds to contribute a total of 10% down.

 

My reasons for denial were "a serious delinquency" and "no revolving balances." My credit cards do have a $0 balance right now but have reported a balance in the past.

 

I have a $250 paid collection from 5/2014 reporting on my EX and EQ from the US Dept of Education for a Pell grant overpayment. I called the Dept of Education to talk to them about it and found out that they were still reporting a balance to their central database (National Student Loan Data System). Equifax reports a $0 balance and Ex reports "unknown" so I'm not sure if this clerical mistake is having an impact but I had them update it to $0 in the NSLDS anyway.

 

My credit history is young. I have a 4 month old Chase card, a 15 month old secured credit card, and 2 Amex cards that I got in November that don't seem to be reporting yet. My 2 student loans are 3 years and 2 years respectively. I recently closed 3 subprime credit cards (dumb I know but I didn't think I'd be applying for a mortgage for another year at least).

 

My lender told me to put a small charge on both of my active credit cards and he's going to do a Rapid Rescore on Monday. He thinks this will work but of course there's no guarantee. He said it's also possible my Amex cards will be reporting by then (statement closes on the 10th) and although new credit is generally not good, the additional tradelines might actually help in my case.

 

The Desktop Underwriter will approve me for an FHA loan. But, unfortunately, this condo is not FHA-approved. 

 

Sorry for writing a novel I'm just so shocked and disappointed. Has anyone else gone through something similar and successfully closed?

 

 

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Anonymous
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Re: Denied Desktop Underwriter with good credit, income, etc

I posted about having a similar issue myself with DU earlier this week. It cost me my down payment grant of 3% = $10k. My LO told me the same thing, i have no revolving debts. He increased down payment, added additional reserves, reviewed my dti, DU just didn't like my file.

 

Ended up going 30yr conventional with 5% down. Approved through LP automated underwriting. Has your LO tried to run it through Freddie?

Message 2 of 3
Anonymous
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Re: Denied Desktop Underwriter with good credit, income, etc


@Anonymous wrote:

I posted about having a similar issue myself with DU earlier this week. It cost me my down payment grant of 3% = $10k. My LO told me the same thing, i have no revolving debts. He increased down payment, added additional reserves, reviewed my dti, DU just didn't like my file.

 

Ended up going 30yr conventional with 5% down. Approved through LP automated underwriting. Has your LO tried to run it through Freddie?


If the LO run it through Freddie the loan would be subject to Freddie Mac's Condo guidelines.  Do your reseach regarding Freddie Mac's condo guidelines before wasting your time.  

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