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Hello,
Looking to purchase a home in Indiana. DTI ratios are good, Mortgage Ficos all above 720 and very little payments on a car loan and student loans. I cannot go FHA because 160K student loan debt that I am paying off with PSLF foregiveness. However, FHA does not care about that unfortnately and nails me with a 1600 per month student loan payment for qualification purposes that will be more than the house mortgage.
Second issue is a bankruptcy due to medical issues (kidney cancer) 3.5 years ago which can be documented. Because under 4 years, automated underwritting (conventional loan) spits out a refer/caution grade (I tell this to loan officers who still do not understand their own programs), so the loan must actually be looked at and approved by an underwritter and not a computer. Most lenders will not do this (for example chase mortgage). I have read all of the fannie freddie guidelines and I can be approved if someone would just look at the file instead of a computer printout. This is under the 2 year extentuating circumstances rules. Does anyone know of a lender who will actually manually underwrite the loan for approval?
This is heartbreaking as I started a new job 10 hours away and I am driving back and forth on weekends to see my kids. Renting in a good school district will be a nightmare and cost twice as much as a mortgage. Thank you for any help.
I'm in the same exact situation here in Ohio as my process was denied since I have $158K in student loans but on the pay as you earn program and they see my $1500 payment which I am not required to make. But this new automated system that they use has my application coming back as "refer/caution". Scores are fine, DTI is fine, credit lines are fine and what I pay in rent is the same as a mortgage so I'm not understanding here and my BK is almost 7 years old.
Personally, I gave up and will probably be signing a rental lease agreement today. I went though 6 different lenders and most loan officers did not even understand what a manual underwrite is or why you need it. They just the little print out from the computer saying approve/eligible or refer/caution. The fact is in today's lending world, you are required to fill in your application online and then it gets inputed automatically into automated underwritting. I am not sure what a loan officer does anymore. I have actually had to explain to two of them that conventional loans do not go by the 1% of student loan payment rule any longer and point them to the section in Fannie Mae's underwritting manual. Another approved me FHA (which they shouldn't be able to because of a not a three old deed transfer) which scared the hell out of me. Yet they all have the balls to charge 2-3 points!!!
The underwritter just verifies the stuff you put into your application is accurate and make sure you did not open any credit cards since the pull or nothing else changed on your app. I was flat out told by Chase Bank and US Bank that they do not manually underwrite loans.
At this point, to help people I will make a flow chart and tell them what to do. In essence though, student loans can essentially bar you from FHA and any serious credit issues under 4 years kill you conventionally. If anyone was ever a candiate for manually underwritting, it was me. Bankruptcy result of medical issues just under 4 years ago. Completely different career field as an attorney for past 3 years, stable income. 730+ middle mortgage fico with no lates on anything for the past six years. For **bleep**s and giggles I applied for credit cards since I now had inquiries. 65K income, and was approved at Pen Fed for 14,500, Discover 14,500, CLI increase Capital One QS from 6,000 to 9,000 and waiting for decision on Venture. So I have 35K at least in unsecured lines of credit, but I cannot get a mortgage on a home puttting 20% down? Makes absolute sense.
You are right.....doesn't make sense at all!!!!!!!!!!!!!!!!!!! I told the company I was working with for the second time, I will see you in 9 years since I work in the public sector and I can have my student loans forgiven after 10 and they would be marked paid as agreed but then again a new law will probably be made up and that would be a black eye on my credit report as well instead of monthly on time payments!!!!! I can't take another denial or having my credit score decrease with every hard pull.
It is my understanding that under the new administration the PSLF program is on the chopping block so I will make plans for an althernative should it be dropped. @fixingmistakes2009
@Anonymous wrote:Hello,
Looking to purchase a home in Indiana. DTI ratios are good, Mortgage Ficos all above 720 and very little payments on a car loan and student loans. I cannot go FHA because 160K student loan debt that I am paying off with PSLF foregiveness. However, FHA does not care about that unfortnately and nails me with a 1600 per month student loan payment for qualification purposes that will be more than the house mortgage.
Second issue is a bankruptcy due to medical issues (kidney cancer) 3.5 years ago which can be documented. Because under 4 years, automated underwritting (conventional loan) spits out a refer/caution grade (I tell this to loan officers who still do not understand their own programs), so the loan must actually be looked at and approved by an underwritter and not a computer. Most lenders will not do this (for example chase mortgage). I have read all of the fannie freddie guidelines and I can be approved if someone would just look at the file instead of a computer printout. This is under the 2 year extentuating circumstances rules. Does anyone know of a lender who will actually manually underwrite the loan for approval?
This is heartbreaking as I started a new job 10 hours away and I am driving back and forth on weekends to see my kids. Renting in a good school district will be a nightmare and cost twice as much as a mortgage. Thank you for any help.
What kind of bankruptcy? Chapter 7 or Chapter 13?
Chapter 7.
You definitely have to go conventional. Set up a payment that will report something other than $0.00 for the student loans. Are you able to wait 6 months. You should get an approved finding at that point. Sorry for the issues, this student loan debacle is ridiculous!