10-07-2010 01:07 PM
I just received word from my mortgage broker that my home loan submission was denied today by HYPERION CAPITAL LLC underwriters for a seemingly un-heard of reason.
All conditions up until this point were asked for and met. 3 judgments satisfied, TSP Loans forced onto credit report (Despite this being inherently wrong). Then, when submitted for final approval, we now have a denial, not for debt-to-income, not for anything obvious, but were told simply-
For an unknown number (1?) of collections on my credit report listed as 'frozen' by the collector/debtor agency.
I can agree when my Broker stated in his 13 years of getting loans approved, he has NEVER heard of such a status, nor this stated reason…as being the sole reason for a denial. The response to his question about why this hadn't come to the table as a condition previously months ago, or even further clarification on exactly what that means, if it is possible to address/fix or not, again, the response was a vague. "I don't know what to tell you." It is apparently some vague [made up?] condition that would satisfy an investor prior to purchasing/funding this loan...
I have done a quick search on the internet for what a 'frozen' status of a collection is, and find absolutely nothing whatsoever. The only thing even related is a frozen 'bank' account by a collector, obtained by court orders etc. My wife and I have scoured for many months through numerous forums relating to credit on the very reputable FICO website, in preparation for obtaining this mortgage loan, and have NEVER run across this phrase, condition, or statement for denial.
This was a application for a VA loan, for my family's first home. We are halfway through a 30 day notice to vacate from our present residence in a temporary apartment. This seems like a extremely scrupulous, and arbitrary reason for denial, and in the 11th hour of our Loan application.
A VA loan is supposed to be unique and is supposed to be more lenient toward us veterans, but it seems like their recommendations, policies and rules are being bull-dozed over by a very paranoid mortgage lending industry, and my family is but an innocent victim of these circumstances.
At the very least the contact could have provided a workaround, a solution, or even a better clarification of what a 'Frozen Collection' is. As far as I can tell, it is a completely made-up term that doesn't have any evidence of even existing on a credit report! My lender tells me to be calm and he immediately is finding another lender to submit to. My wife isn't gonna like this news... Has anyone ever heard of this 'reason' for denial?
sorry so wordy..
10-07-2010 01:36 PM
I'm sorry you have to come to the forums under these circumstances and I hope you can get this mess fixed. There are some true mortgage experts here who hopefully can give you some good advice.
One thing you need to remember though is that the VA doesn't actually do any loans for housing. All they do is guarantee the loan. You still have to apply through private lenders. I've had my problems with the VA but your denial has nothing to do with them.
Good luck in getting this worked out.
From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work
10-07-2010 02:18 PM
thanks for the good wishes Sir, And just to clarify, I know it has nothing to do with the VA, I’m just frustrated that I’ve read the lenders handbook for VA Loans, from the VA, and it’s full of ‘Strongly recommend lenders …, Keep requirements under such and such…buyers shall pay no more than etc etc…” and it all means absolutely nothing, for it’s a federal program that has absolutely no power to enforce or to back up It’s many recommendations and policy’s for getting a veteran a loan. Its still, all simply left up to the unethical decisions of businessmen counting their future gamble on profiting on my home… but i digress....
Yes, we need a lot of luck in the next week. Thank you.
10-07-2010 02:41 PM
We have a few small collections, and one OLD charge off that was property transferred to my ex via divorce decree (Auto Loan) but all collections were figured into a % of monthly debt owed, for our Debt to income ratio. The problem is, they didn't tell him which collection account is the problem, and we still don't know what 'frozen' means. My wife is guessing it was being disputed, but they couldn't just said that and we could've fixed that.
Update- MB is now saying:
"Hyperion pulled a new report from a different company that does not show them frozen. However, they have added a few conditions…I’ll keep you posted"
sigh...just holding our breath now....
10-07-2010 03:29 PM - edited 10-07-2010 03:30 PM
Sorry to hear about that. I just got through a similiar ordeal. I put in for a VA loan that I was pre-approved for. They told me that I would be approved and I gave notice. The day before closing, they came back and declined the loan. I was able to get an extension and go through a broker who "Garunteed" me that I would get the house. 6 months and several thousand dollas later, I still have no house. Luckily, I was able to stay in my current rental house.
I was told my several different lenders and my broker that it was much easier to get an FHA loan approved than a VA loan. I had a couple of places tell me that they are not approving any VA loans at all currently.I also found out that if you have any disputed items at all on your credit report, they will automatically turn you down for a VA or FHA loan. You can see my scores in my signature. I have no negatives on my credit for over 5 years and I still was nto able to get any type of home loan.
10-08-2010 09:42 PM
New conditions are relatively minor, except for the last one I am trying to get.
-explanations for a couple random deposits in our bank statements. No problem there.
-a signature on a couple new forms.
-an explanation for past due amounts on child support account.
That last one is tricky, I'm really not past due, but our lovely state of Oregon takes the payments automatically out of my check on a bi-weekly basis, but doing this only takes out an 'averaged' amount per year divided by month and thus is less than court ordered monthly amount, so there is always a little balance left over. This gets settled at the end of the year, but in the mean time, it registers on my credit as a negative standing every month, even though it is current and paid. It's complicated. Somehow, I have to see what the Child support agency will provide me, something positive on paper resembling an explanation for this situation. I'll have to see what they can do.
The insurance co. called to say the lender seemed to schedule Home insurance start date [closing] on Oct 15th... that is not much time to get a condition satisfied and a brand new loan approved! no stress!
10-23-2010 11:44 AM
Update- now I have paid the 'balance' on child support, that I was not technically in arrears for, but looks as though it is on CR, because of the bi-weekly pay schedule out of my paycheck, it's always 'behind' on the full amount, until the last few payments in the year...it makes me look bad even though i'm paying on time, every month, the amount my payroll calculates to pay them... awesome news for guys in oregon who pay child support and want to get a home loan! Be prepared, pay off balance NOW and don't bother fighting a losing battle of explaining it to underwriters.
So this leaves one final PAIN of a condition to meet. The underwriter insists on getting a document/copy of the old, charged-off auto loan that contains a phrase for the 'collateral', meaning the actual name of the vehicle, as it's associated to the credit report entries account number. The problem they have is, in the divorce decree, it only states 'wife shall be awarded 2002 dodge caravan'..but no account number. They won't put two and two together by seeing this is the ONLY auto loan on my report, and by the dates of charge-off compared to divorce decree etc...nope...they want both pieces of info on the same page..and THEN they MAY sign off on that.
The part that is even more of a pain, is in order to get said document, I have to go through Key Banks recovery department, and because the loan is so old, it's being held at a 3rd party data storage facility in some other state. They have to request it to be found, then faxed to my MB. At first they just put in a general request, which apparently takes 10-14 to even 30 days to get the documents (after they originally said maybe 3-5 days). So I call back numerous days of the same week to see what's going on, and finally get a 'supervisor' to maybe 'look into it' and put in a request to 'expedite it'. But still nothing for several days. In this day and age, even under extremely urgent circumstances, it seems there is no way for this company to move my request up the ladder a little bit, to get a simple piece of paper faxed. [not even mailed!]. They now state it's 'up to that facility' to get it processed, probably still on a first-come-first-serve basis.
It's now a week from that contact, I left a msg for the manager to call me on monday for a status check, begging for any help he could provide. We are now over a month from when we were supposed to close, and now the builder has sent a letter stating we need to close by Nov 12 or else they will put our home [that we've invested thousands of dollars in upgrades, and emotion into] up for sale to general market....(we also had to call landlord and say we can't move as expected quite yet) needless to say my wife and I are at our last nerve of worry and hopelessness. We have 3 weeks to get this document found, faxed, and then our credit pulled again, then closing fees & signing! No stress!