Denied in automated underwriting... Help.

[Anonymous]

My husband and I are trying to apply for a va home loan for a 249,000 dollar loan with wells Fargo. It will just be my husband on the loan. We were denied in automated underwriting score being 589/615/683. We are paying 0 money down and sellers are paying closing costs. We have no debt beside our auto loan. My husband has one fairly new 30 day late payment on the auto loan which is really affecting his score plus wells Fargo is stating that we are past due 460 dollars.mwhich is not true. We deferred the payment the payment was deferred and are now current. We provided proof of this which our LO is providing to the underwriter. My husband was blown up in Iraq and due to his TBI, extreme PTSD, and memory loss we missed our payment on accident. This is the only one he has EVER missed. Does anyone believe we could pass underwriting? We don't have any savings because we invest in silver. We have over 7,400 dollars in silver. LO is worried we don't have enough money in savings and we have 1 30 day late. Which we are trying to dispute. Do you think it is possible to pass?

[germaine47]

Ask if letter of explanation will be enough and that you will be responsible for making sure all payments will post of time?  I know that when I went throught the home buying process my MB specifically stated that I couldnt have in lates in the past year.

[StartingOver10]

Go to another lender. You are only in the "pre-approval" stage according to your post. When you get to actual underwriting it will be more difficult

Wells Fargo is not the best lender to go to if you are looking for a smooth process IME. Try a mortgage banker or correspondent lender in your area. You will have to shop a little bit; but you have the info so you can shop wisely. A mortgage banker underwrites and funds their own loans, then they sell the loan. They have more funding resources.

It is a tough hurdle to jump with that 30 day late in the last year so make sure you tell the new lender about it upfront. How recent was that late payment?

Also, going into a purchase with no reserves is risky. To a lender it is extra risky. You are getting in with zero down and essentially you are paying nothing to buy the property and if you have one bump in the road it could create issues with making the payment. (This is how the lender probably see's your file).  You can overcome risk by having reserves.

Is there any way you would consider converting some of your silver to liquid funds to keep in a savings account? This way you can show readily available reserves and you might be able to over come the recent late payment that way.

[FrugalRican]

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@Anonymous wrote:
We don't have any savings because we invest in silver. We have over 7,400 dollars in silver.

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This is potentially very scary, not only for the lender, but for yourselves.

You shouldn't be keeping all of your savings in one "pile". At least it's physical silver, right?

Because you should definitely at least sell half of that and put that into the savings account. It looks a lot better to your future LO.

Other than that, I agree with everything else StartingOver has stated. He knows his stuff.

[StartingOver10]

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@FrugalRican wrote:

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@Anonymous wrote:
We don't have any savings because we invest in silver. We have over 7,400 dollars in silver.

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This is potentially very scary, not only for the lender, but for yourselves.

You shouldn't be keeping all of your savings in one "pile". At least it's physical silver, right?

Because you should definitely at least sell half of that and put that into the savings account. It looks a lot better to your future LO.

Other than that, I agree with everything else StartingOver has stated. He knows his stuff.

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Thanks, Frugal! Only one thing....I'm female Hard to tell on the message boards....

[FrugalRican]

She knows her stuff.

(oops)

[tooleman694]

having 7k in silver I find odd.

Nothing wrong with investing, but only after you have some savings.

[Anonymous]

Thank you everyone for your replies. We have provided a detailed letter of explanation as to why we missed the payment. We definitely would be willing to sell out silver if it meant our profile would look less risky. I asked my LO if I should sell it right now and if it would help our case and he said we needed to be showing a constant steady line of savings 200 here 200 dollars there. We have gone to an actual underwriter now and we are now waiting for the response which I believe takes a week and a half...