Do the research yourself... save the headache

[Hammer23]

Many of you know I closed on my home loan with Michigan Mutual almost a month ago. 

I thought I would share my experience with others and end with a piece of advice. 

I had a bankruptcy (due to job loss) in 2009. In that BK my home which had an adjustable rate mortgage that I could not refinance was included. 

I had rehabilited my credit to a 671 middle score and wanted to buy a home. I had a downpayment saved and felt ready to be a homeowner again. 

I contacted Quicken Loans and Wells Fargo on 3.19.2012 about Pre Approval for an FHA loan. Quicken Pre Approved me in about 10 minutes. Wells Fargo would not approve or decline me until June. I started working with a realtor and upon finding out about my BK/Foreclosure combo, she asked that I let her mortgage guys give me a second approval outside the Quicken Loans approval as she has had horrible luck with them. 

I went through 3 of her mortgage guys who all pretty much refused to talk to me until my foreclosure was 3 years from the date of the deed transfer. That would have put me out of the market for another year. 

I wound up doing some research online about FHA and found that in 99% of all cases the foreclosure had to be more than 3 years from the transfer date. My Quicken Loans approval was pretty much useless at this point. Thats when I researched USDA Guarenteed options. I emailed USDA with a senario and was informed that with my credit score over 640 they would not need the 3 years required by FHA. As a bonus, they don't require a downpayment and the MI is much less than FHA. Sounded like a winning option to me. 

I went back to my realtor's mortgage people and they informed me that the email I had from USDA didn't matter. All banks use "Overlays" that are more restrictive that the USDA guideline.

I found a LO at a mortgage company who was willing to "give it a shot" He called his lenders and found one who would underwrite a USDA Guarenteed loan with 12 months since the foreclosure / BK. We submitted a package to underwriting with a TBD address. I waited about 3 weeks and was informed I was "Accept/Eligible" with USDA and Michigan Mutual had issued a "Conditional Approval" I went house hunting, made an offer, offer was accepted, conditions where cleared, USDA issued a commitment (took a month), I closed and moved into my new home. 

The point is, if I would have listened to the 4 people I talked to before I did the reasearch myself and shopped for a compitent LO, I would still be a renter! 

Don't give up hope, keep asking questions, and don't take no for an answer. 

[webhopper]

Your story is similar to mine. I had issues with underwriting due to to a high dti because of rental property. I shopped for mortgage pre approvals; obtained them and decided to go with a local lady that my realtor recommended. Anyways; I got pre approved through her; made the offer... the offer was accepted and then my financing fell through.

Overall I went through 4 lenders...
1. Bank of oklahoma
2. Schmidt mortgage
3. Spiritbank
4. Quicken loans

Before I found one who could get my file underwritten. My file was underwritten manually by the mortgage insurance company.

During this time I started reading underwritimg guidelines issued by fannie and Freddie as well as guidelines written by different mortgage insurance companies.

That's how I found out that loans are eligible to be purchased by Freddie if they are underwritten using an approved mortgage insurers process.


I would reiterate that you should always do your own research; ask questions if.something doesn't sound right; and definately dont accept no for an answer

[luckelle]

Greatly motivating!!

[Ron6262]

    That is sound advice Hammer,  I replied to another threat earlier telling the original poster that  you are your own best friend in this struggle.  Its true, you have to be your own expert, your own consultant and you own researcher.   My LO told me his office has 90 loans going right now, I told him I only had one.  How much time do you think was devoted to mine by him, and how much my me?  I think that is why so many folks get declines, first rough spot LO drops you and goes to someone easier.

[Anonymous]

Thank you so much for sharing. My husband and I are in the process of purchasing our first home and we feel clueless about what is going on or what is expected. We made it through underwriting, it came back with conditions, then came back clear. The LO sent our file over to Rural Development last week, and she said she is waiting on a committment from them and then it will go back to the Underwriter (which I don't understand why) and then after Underwriting is finished, we can move to close. Our first closing date was July 30th, then it got moved to Aug. 14th and now we just signed another addendum for August 30th. I never want to purchase a home again. I don't know if this is a good sign we are getting the home or if there will still be more roadblocks. I'm stressing because of children start school soon and we have to transfer them to a new school district.

[Hammer23]

I had to wait almost a full month for RD to say yes. It went quick after that

[webhopper]

As far as the kids going to school; if you have the ability to drive them to school and pick them up from school at the new school; then I would try to register them at the new school using your purchase contract and GFE as proof that you intend to reside.in the district. I ran into this problem with my daughter in January. I intended for her to switch schools during the Christmas break but we were still waiting to close. We closed on January 24. I talked to the school administration and they didn't have a problem granting her a provisional instatement into the new school. Once we moved in I brought the electric bill in and was able to remove the provisional instatement.

[oma]

Your post is exactly my situation and I am so thankful for you sharing this on the forum . I do have a mortgage broker but they arent signed up the MM so would you be kind to let me know your broker? this way I will make them my broker too to get things rolling.

Thanks very much.