Hot mess! VA said Yes, UW won't approve! Need Mortgage Pro help asap PLEASE!

[sun_shine64]

~Hoping this is within your realm~

We need any suggestions/help anyone may have? Long story short we were pre-approved for a mortgage in 11/14. We told lender we were applying for a VA loan. Broker/Lender never ran CAIVRs report. We found a home, accepted offer, earnest money down, contract signed. Brings us to a month ago - since we're rebuilding credit the loan automatically went to manual underwriting - things were going fine, we submitted all paperwork needed, paid off all bills needed, letters of explanation for medical collections not paid - all fine and dandy til the CAIVRs was run. CAIVRs pops up in my husband's name. He filed bankruptcy after job loss and divorce in 2010. The home they owned was put in and discharged in that bankruptcy in 03.2011. Found out the Bank that had that home has sat on it for the last 4 years and done nothing with the title - they haven't sold it, haven't foreclosed it, nothing. The house sits empty and the bank has done nothing in the last 5 years. So through a lot of time and sweat and help thru this site and after being ignored by HUD for over a month, I finally got someone there to look at our case and got the CAIVRs suppressed! Thought we were free and clear then right? No. The title of this house, even though discharged through BK in 2011 is still in my husband's name. The Broker actually contacted the VA himself and the VA said they were fine with the new mortgage/financing as long as the CAIVRs was suppressed - it's no problem with/for them, they didn't care about the title issue. BUT, the Lender that the Broker is working with refuses to okay/accept this mortgage/financing because the title is still in my husband's name. The Broker and I have gone round and round with the woman at HUD and she expressly stated that since the home was discharged in the bankruptcy that my husband is free and clear of that home and no one can come after him for it no matter that his name is still on the title due to gross negligence on behalf of the bank. This is a gross deficiency caused by the original lender of that home and no longer my husband's problem/responsibility. The woman at HUD went on to state that since the VA has no issue whatsoever with this title problem that there should be no problem getting the mortgage/financing and that the Lender shouldn't have a problem with it either.

Needless to say we are sick to death over this. Our financing contingency has expired on our contract. We were supposed to close on our new home this week, that's not happening. The broker is just sitting on his hands because he can't get past this 'title' issue. The Sellers are still willing to resign another contract if we can get approved financing and move forward with this process. The downside to this is now they're reshowing the home as they need to sell and can't sit around and wait for us. We are dead in the water here, don't know where to turn and daily run the risk of losing our new home.

My question to the all the Mortgage professionals here - if we turn around and go to another lender and apply for a mortgage through a different lender - will this title issue come up again? The only reason it came up this time is because the CAIVRs problem brought it forth. If we go somewhere else to apply and they rerun a CAIVRs report, they won't find one this time. If they don't find a CAIVRs, does this title issue still show it's ugly head somehow? Or would we be free and clear of having to deal with it with a new lender/new application?

Like I said, we've got the VA's blessing with this, we just need to find a lender. As I stated before, even though our application had to go through manual underwriting the only thing that stopped it was the CAIVRs report and the subsequent title problem/discovery.

We are just totally lost right now.

Thank you.

[Lemmus]

...ditch your current broker ...imnsho if he was a legitimate "broker" he'd have multiple lenders available (unless of course there are other significant problems with your loan)

...otoh, don't hide the problem when you discuss it with other lenders ...get it out front rather than count on it not showing up again in uw ...caivrs is not the only place that title can be found ...there is no shortage of mortgage lenders that can/will deal with your problem ...you just have to do a little leg work to find the one you need ...hth 

[DallasLoanGuy]

the lender will sell this loan. they can ask for guidance from the bank they sell to. has this been done?

you will likely deal with this with a new lender

[ShanetheMortgageMan]

Are you applying for an FHA loan or VA loan?  You talk about VA saying it's OK but you are also talking to HUD which oversees FHA mortgages.  If your CAIVRS is clear then that should be the end of HUD's involvement.

When a mortgage has been discharged through a BK, then the BK discharge starts the 2-year waiting period that VA requires after a foreclosure, it doesn't matter when the home eventually gets foreclosed on (although if the home hasn't been foreclosed on, I could see an underwriter still including the property taxes from it in your debt to income ratio).

However FHA measures the foreclosure seasoning from the time the home is actually foreclosed on, which is 3 years.

So if you are applying for VA financing you should be able to fine a lender who would be OK with this, but if you are applying for FHA financing then you are 3+ years out.

[sun_shine64]

Okay - the Lender/Broker we are working with will sell the loan, but the Lenders he uses won't touch it - that's what he's telling us - because the title of the home that was discharged in the BK is still in my husband's name.

The home that was in the BK and discharged was a FHA loan - this is why we've had talkings with HUD as we needed HUD to clear the CAIVRs. But this woman I've been talking to at HUD is trying to help me, very nice lady. This is what she told me yesterday -  "Now, regarding the existing FHA case - I did just find out from Nationstar (the mortgage servicer) that there is an issue with Maine state law and they are pending some decisions there involving foreclosing in the name of MERS.  They can’t do anything until it’s resolved."   Of course I had no idea what 'MERS' was so I looked it up. Not sure of all the legalities surrounding the mess with MERS, but trying to read some of the stuff out there, they may never clear the title of my husband's name. The HUD lady told me I should contact my Congressman asap for help - I'm just not sure what my Congressman could do at this point?

Now you mention property taxes - there are no property taxes? If there were taxes they would've gone in the BK with the house. We've heard nothing about this being an issue - only the title.

We are looking for a VA loan. The Broker/Lender has personally called the VA and they're fine with the title still in my husband's name as long as the CAIVRs is clear - which it is, because they know no one can come after my husband for anything pertaining to the other home as it was discharged in the BK. The date of the BK discharge is 03.2011 so we've surpassed all the waiting periods for FHA and VA.

So, I'm guessing my best bet here - since our current Broker/Lender is sitting on this - is to look for another Lender?  

We live in a small rural town. Nobody around here used to do VA loans that's why we sought out this other guy - through a referral. I have recently found out that the local CU has started do the paperwork for VA loans - and they send them out to a CU morgage company to be processed. I'm wondering if I should drop in and try them?  Or would you have any other suggestions? I don't know if a CU would be more favorable over a big bank or mortgage company? I guess we basically need to find someone who isn't afraid of this title issue.  The woman from HUD also stated  -   "Those two things right there – the bankruptcy documentation and the VA guarantee – are totally all you need.  The Chapter 7 discharge and non-reaffirmation is documentation that no one can come after you for this and the VA guarantee is documentation that even if they do, which legally they can’t, VA will make the mortgage company almost whole in case of default, so the risk to them to make the loan and service the loan is close to nothing. These things are fundamental and basic in the mortgage world.  Everyone in the business should know these things."

That's about all the info I have - we just didn't know where to turn, who, if anyone to turn to, or where to go from here. We hold our breath every day someone else doesn't show interest in the home we are trying to buy.

Thank you!

[DallasLoanGuy]

if they wont budge ypou need to do something

[Lemmus]

...imnsho your real problem is no longer the title issue so stop spending time on something you can't solve ...your problem is that your current lender can't/won't handle it and the delay is threatening the property you want ...so find another lender ...now ...its really that simple ...your caivrs is clean now ...you have all the necessary documentation ...you apparently have the necessary funds and credit scores ...there is no shortage of mortgage lenders doing VA loans ...your lender does not need to be local, its nice but not a necessity ...google VA mortgage loans, talk to your realtor, PM Shane, whatever (theres a current thread of happy users extolling his virtues)...start calling ...tell your current lender thanks but no thanks, you're moving on ...get a new pre approval asap and get a new contract on that house ...there is a lender out there for you but you need to find them ...so go find them ...hth

[frugalQ]

Ok, so i'm going steal BamaGuy's shine....

lemmus wrote:   PM Shane, whatever (theres a current thread of happy users extolling his virtues)

i can hear the harp being played from my computer over on that thread.  ROFL

sorry, I coult not resist....carry on. 

[sun_shine64]

Okay, okay, I gotcha! Yes, I made the first phone call to a local bank. LIke I said we are a rural small town. I guess they don't really do VA loans after all - they send me a link to apply somewhere else. So I will try this avenue next. Our scores are higher than needed and we have the funds. We were pre-approved this last time, I see no reason we wouldn't be approved again? 

Thank you.

[Lemmus]

...most banks tend to be more conservative in their lending practices than other lenders 

...btw, being rural, have you thought about using USDA rather than VA? ...if you qualify, their loan guarantees are a lot more flexible in many ways than VA/FHA

...and where has your realtor been in all this? ...should have been bending over backwards finding a lender that can close your loan ...no close, no commission ...best incentive going, eh