Question about Loan officer sending application to in house underwriting

[Anonymous]

not sure.  It depends upon your expenses, etc.  AU is unlikely to approve with a charge off 6 months ago unless numbers were fudged or there were serious comensating factors like high reserves and low DTI.  My concern is that the student loans were not counted by the LO to keep DTI low and then some reserves allowed the AU to approve.  The problem is that the UW is going to count the student loans more than likely.  generally to be considered "high" reserves you are talking 3-6 months of your expected home payment at least.  By the way, I am not saying this is going to fall through, just that I would check on thise items.   It's hard to get an approval with a recent charge off and the LO not counting student loans usually backfires.  The 2013 means nothing because as I said, deferrements are always conditional.  Try to call the lender and get a letter guaranteeing that the loans are not going to go into repayment in the next 18 months.  If you get that, they might be able to back them out of the DTI.  But in 90% or more of cases, they will only give the deferrment letter which stipulates certain conditions.

[Anonymous]

school deferrment will not count because 6 months after "dropping out" payment would begin.

[Anonymous]

The lender that my Loan officer works with said that the letters of deferment are fine. We do have low DTI, only debt we have between the two of us equals $165.00. We were approved with AU and numbers were not fudged. We only have a little more that a thousand in the savings and thats what went through AU.

Message Edited by sgress1533 on 07-28-2009 05:44 PM

[Anonymous]

that is good for you if so, but just to clarify, LO's say that all the time to buyers.  It is not their decision in any way how the UW wants it counted or how FHA requires it counted.  We have seen numerous examples of this. 

[Anonymous]

I guess I'm just going to have to pray that the lender is right and that my student loans will not count. Should I call my student loan companies and have them write another letter?

[Anonymous]

I am not trying to argue BTW.  I hope that all works out the way your LO is stating.  But, AU approval with no savings or reserves, gifted down payment, deferred student loans, and a charge off 6 months ago seems fishy.  It sounds like numerous examples on here where the LO is pushing a file through.  An example of this would be not counting the student loans and hoping the UW doesn't catch it.  This would show really low DTI and may be enough comensating factor to allow approval.  Obviously I don't know the LO or the file, I am just inserting some caution here.  It could all come off without a hitch.  But a recent charge off is usually a deal killer without a strong factor to overcome it.

[Anonymous]

from the situations that have come up on here, and in my experience as well, the letter would have to state specifically, that no payment will be required on the loans under ANY condition for 12 months from closing of your home purchase (to be safe say 18 months from now.)  A deferrement letter is dependant upon your school status, etc.  So if you were to drop out, repayment would begin normally in 6 months or so.  So, the general deferrment letters always have language that stipulates conditions, which is why they usually will not pass the muster of an UW.

[Anonymous]

I know, and thank you for all your advice. I believe that my LO is really good, she just helped my close friends purchase a home. By the time we close in September, the charge off will be 9 months old, so hopefully that will help. LOL.

[Anonymous]

The best words of advice I can give: TYLO (trust your loan officer). It sounds like she knows what is going on and has been waiting for the right time to move. If she says that you're going to be fine, then rest assure. I kept worrying and bothering my LO, but for no good reason... everything turned out fine.

[Anonymous]

Thanks jinjerly, I do trust my loan officer as she has always been straight forward with us. I knew from reading all the posts on this site that we would have to write a letter of explanation for one account with lates, and sure enough she asked us to write one when we signed the application. Here's to hoping that we get fully approved and can put a contract in the next few weeks.