HELP! Received Desktop Underwriter approval but not approving again

[Anonymous]

Hello, 

So I recently applied for a mortgage loan and was approved through DU for Fannie Mae's home ready program, at the time of approval in Oct. 2017. My middle score was only 640, I had a balance on one credit card of $195 that only had a limit of $211 and a recently paid collection that appeared on my report. All other credit cards I make sure report at a $0 balance and I just missed this payment by a few days. I also have a line of credit through my credit union that was reporting a $400 balance out of the $1000 credit limit. 

With this approval I moved forward per loan officers instructions. Approval for 215k loan with 5% down. 

Fast forward - Received a purchase and sale agreement, title commitments, locked rate, cleared title search and set to close on 1/3/2018. Tuesday, the loan officer had to do a credit refresh to get the ball rolling again since my closing date was so far away in the beginning.(Landlord wanted to wait to avoid tax penalty).

My credit score has went up 30 points and my middle score is now 670, not balances reporting on my credit cards and line of credit is $0 as well. There have been multiple checks for my credit from this loan company since October, minimum of 3, but that is the only thing that has changed. The Loan officer is now not able to get an approval through the automated approval system and I am confused. I have a better credit picture now than I did 3 months ago, and my credit report has aged as well. Why is it no longer approving? 

My loan officer is at a lost as well as she says I meet all criteria and they are baffled as well as to why it will not approve. She states, they have tried everything and nothing will take it. She stated that my DTI is low so she is not understanding as one of the scenarios they plugged in was paying off my car, which she knows is not a possibility. 

Credit picture of debt payments.

Recently consolidated all of my student loans (3/2015) so they all appear on one loan and is current with a reported payment of $22.77 (IBR) plan. Oldest student loans (about 10) reports as of 1999 and is paid, closed and never late

I do have a Master’s Degree and my student loan balance is high at $150,000 due to be forgiven in 10 years (8 remaining).

Car loan opened in 2/2017 – payment $452 traded in previous car that is now paid due to lower interest and payment. Balance $18,000

I have to use a program that accepts an IBR payment for my student loans as I do not make enough to support the 1%. 

I have been at my current job for almost 8 years and this has all been verified too. This is so frustrating and I don't know what to do. Why would it approve me at a lower credit score and high debt utilization on 2 cards/accounts but not approve me when I have no reporting cc/credit line balances and a credit score 30 points higher. I confirmed that the lender has no overlays.

I don't want to lose out on this house as it is a rental property that I have been renting for 8 years and the landlord is giving me a great price. 

What can I do to get approved?

[Anonymous]

I have to use a program that accepts an IBR payment for my student loans as I do not make enough to support the 1%. 

I have been at my current job for almost 8 years and this has all been verified too. This is so frustrating and I don't know what to do. Why would it approve me at a lower credit score and high debt utilization on 2 cards/accounts but not approve me when I have no reporting cc/credit line balances and a credit score 30 points higher. I confirmed that the lender has no overlays.

I don't want to lose out on this house as it is a rental property that I have been renting for 8 years and the landlord is giving me a great price. 

What can I do to get approved?

[Anonymous]

Were there any guideline changes? Is this still with the Homeready Program? I know that program has income limits, did you recceive a raise or something that made you ineligible?  Was there an increase in interest rates that caused your DTI to be too high?  I don't know about Homeready but I know for FHA if you are in IBR, they take a percentage of your loan into your monthly DTI, not your current payment amount.  Your lender should do more digging or maybe check with another lender.

[JVille]

Who are you applying thru? A Bank, Credit Union, Mortgage Broker? Why isn’t their (your) Underwriter being consulted about what the issue is? And why can’t this be Manually handled to figure out what has gone wrong? Only a really aggressive and savvy lender will be able to pin point the issue.
Please come back and share when it’s figured out!