Fannie Mae spits out referral, no explanation

[Xtracho]

This is getting tedious and down right frustrating.

- purchase price: $360K

- loan amount: $324K (10% down)

- no collections (one civil judgment from 2010 that has been paid)

- credit UT 16%

- DTI less than 5%

- cash reserves to close: $83K

- mid score: 678

- gross annual income: $150K

- time at current job: 5+ years

- time in industry: 27 years

...yadda yadda yadda

DU spits out a referral? And yet no lender can explain to my why. I've been told they've never seen anything like this & have gone so far as to have their colleagues run it as well....with the same results. How am I supposed to fix it if I don't know what the issue is? I suppose I am looking at a manual underwrite. But this really hacks me off being told Fannie Mae won't spit out approved/eligible without some specifics.

[Anne1208]

Wow, I have no advice, but you have a pretty solid profile.  makes no sense to me.  

[Xtracho]

There is no underlying mortgage as we are renting. One lender mentioned that Fannie Mae may be kicking it back because of an equity issue. But I find that hard to swallow. My scores should bump a little more as the rapid rescore that was done occurred while my UT was at 24%. It has dropped to 16% since the rescore. I'd be much less peeved if some of the so-called experts out there could offer up a reasonable explanation why Fannie Mae DU spits out a referral.

[Maddog_]

In my humble opinion, while your mid-score exceeds the minimum, it is a tad bit on the low side.  That could be the reason for the referral, combined with the slightly above average loan size.  The paid civil could also be the trigger.

[DallasLoanGuy]

unless the credit file is thin.... i see nothing wrong

[Xtracho]

Not quite sure of the definition of the term "thin" credit file. I have 4 trade lines reporting. An auto loan paid with no lates. We've pretty much paid in cash for everything else we own.  Not a single prospective lender has expressed concern for the paid civil judgment as it is five years old and will fall off in two years. I do have a lender that has told me I am approved for the loan & has provided a "pre-approval" letter. It seems pretty solid although I am of the opinion that such letters are worth less than the paper they're written on. The proof comes when we are 100% good to close. I don't really trust very much in lip service but at this point it appears that is all I have to go on. This lender has told me in emails that their Senior Underwriter has seen the initial numbers in the file and unless credit, income, debts, etc. change we are good to go. With that assurance we submitted our offer on the property yesterday. And perhaps the expected bump in scores once the lower UT is reported will put me over the hump as far as DU is concerned.

But based on the lack of explanation from prospective lenders & their dismay at the "referral" from DU, I am not so sure any bump in the mid score is going to make a difference to Fannie Mae. It just pisses me off that I've been so diligent and worked so hard to clean up the credit files. Only to be shot down while others breeze through DU with files that are sketchier than mine.

[DallasLoanGuy]

thin = low number of credit lines.... especially if they are all new

a person with 1 paid auto

1 new auto(2 months old)

8 credit cards(all >6 months old)

has a thin credit file. thin doesnt mean BAD.... but it doesnt mean GOOD either.  

sounds like you found a lender to do a manual fannie deal. those are hard to find.

good luck

[Xtracho]

Thanks for the clarification. In the interim I received a call from a lender this morning. He has me approved with Freddie LP. Docs are sent & file is now in underwriting. That's a good thing. Now to navigate the underwriting maze to get to close. Step by step.

[DallasLoanGuy]

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@Xtracho wrote:
Thanks for the clarification. In the interim I received a call from a lender this morning. He has me approved with Freddie LP. Docs are sent & file is now in underwriting. That's a good thing. Now to navigate the underwriting maze to get to close. Step by step.

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ah... the old 'flip it over and run freddie' trick

just had one this month that fannie didnt like and freddie did

[Xtracho]

Apparently so. And I'll take it. I've been told that either Fannie or Freddie approved helps to streamline underwriting. Looks like 4-5 days for that. Then on to loan processing. Feeling much better about things today for sure. Thanks for your expert opinion and guidance. It's much appreciated.