Shady Mortgage Lender

[Anonymous]

I was pre-approved by a lender for 200k for an FHA loan.  I spoke to him today to give an update on my financial situation. I've received a collection for $2k, I owe the money and they've agreed to not place on my credit if I pay by the end of the month. 

Based on his calculations my pymt would be $1420.  Down payment $7450 closing costs about 8k. We called him to give an update.  We told him about the bill we have to pay.  We also told him that with that recent bill we wouldn't be able to afford the down payment and DH has gotten a paycut so we would no longer be able to afford the monthly payment.

He asked for recent bank statements.  After receiving them he told us that there is currently enough in the bank for the down payment.  I then told him that we would have no reserves left with paying that debt, not enough for a down payment.  We'd still need more money.

His response, you are still preapproved for 200k purchase.  You application made it through automated underwriting.  It's up to the bank to approve or deny you at this point.  You will have to pay $400 appraisal to move you application to the bank.

I must admit, I called him a crook and part of the problem for the mortgages that have helped create this horrible credit crunch and economic downturn. I didn't say it directly to him, I was cordial and hung up the phone 1st.

So crook was a little harsh, but it's like he's almost forcing me into a loan.  Mind you, this isn't the payment that he quoted me either.

I'd love to hear everyone's opinions.

I also want to add that I have not paid my monthly bills, hence I have a lot in the bank.

Another note, our DTI is now well above 50%, still we are approved.  

Message Edited by lessons_learned on 07-08-2009 09:57 PM

[Anonymous]

Honestly, he was doing his job.  You told him that circumstances had changed, and he informed you that it would no prohibit the loan.  It may have been a deal you were not comfortable with (not having any reserves), but most people are more concerned with getting the house/approval at this point in the game and he was just following through on that.  He was giving you options.

That said, if he were to continue to hound you on a regualr basis (not calling every couple weeks to see how things are going, but call every day) or he kept requesting more info, etc then it might be time to be a little more forceful about telling him no.

To answer, he was not being a crook or doing anything else wrong.  He was just telling you that the collection and paycut were not jeopardizing your option as far as getting a loan.

[Anonymous]

Honestly i don't think it's fair to lay the blame on the lenders' doorsteps. People know their financial situations better than lenders do. You know your lifestyle, how responsible you are financially, what you can afford, etc. Just because someone else tells you that you can afford more doesn't mean you can and that's just common sense. Frankly, they're just doing their job according to some written guidelines someone did their best to create.

[DallasLoanGuy]

it is the lenders job to honor your wishes.

you want a house? the lender tries to get the financing for you

people who sign the dotted line when they know they cannot afford the loan are the problem..... not the loan officers(usually)

however... i do believe the loan officer should have gone over payments and down payments at a lower loan amount to see where you are comfortable....

off topic: did you say a collection agency was going to put something on your credit report?

you owe them? 

or do you owe someone else and that collection company is trying to collect?

if this is a collection agency, then you can send them a cease and desist letter to make them stop collection activity.

putting a derogatory item on your credit report is a collection activity

[Anonymous]

Just because you are approved for 200 doesn't mean you have to purchase a home in that price range. You can always find a cheaper house the decision is all yours not your loan oficer. My advice to you is to look at a cheaper house that fits your budget. Remember you are going to have to make the monthly payments so do whats best for you..

[Anonymous]

1st of all, I didn't mean to offend anyone.

Secondly, I was just venting my concerns over this officers wanting us to waste money on an appraisal to get sent to the bank when we know that we will no longer have the down payment.  We know that FHA requires 3.5% down. We can't get it gifted to us, we won't have the money in the bank by close, so my question was how could he approved us for so much money?  I just tried to give this man the most accurate picture of my finances.  But he only included the info that would get an approval.  I asked him what would the bank do if they saw that we only have part of the down payment money.  He told us that they would deny the loan.  I asked him well why would I blow money on an appraisal just to be denied.  No answer, and subject change.

I was just stating my discomfort with this man, that's all.

Of course I know that it's my responsibility to get only what I can afford. I've got a very strict budget when house hunting.  I put everything into my financial calculator.  I shopped around for the best insurance, decent savings accounts, I watch my 401(k), etc 

I've even given the EXACT info to several other lenders, they don't approve me for the same amount once I mention this tuition bill I will have to pay and decreased income. The bill is mine, it needs to be paid.

Thanks for all of your comments 

[SonorityGenius]

The LO wants his commission; that and to make the loan for you.

If he gets you to pay the appraisal and suck you in the whole mtg process - "we're almost there!" he probably knows you will try to SOMEHOW get the 2k you need at closing and file closed.

But I am glad you had the higher sense in realizing that you just couldn't afford it at that stage, and decided to wait, not many people do this because they "already fallen for the house"

[BungalowMo]

I have to say that when you told him your latest financial issue & that you could no longer afford the house or the payments involved in closing....that should have been it.  He can certainly mention that you are still approved for the loan for the next 65 days, or whatever the cutoff is, and don't hesitate to let me know if your situation changes.

But.....to tell you you can still afford this when your DH is making less $$ and you have the 2k debt to pay off... that says he ONLY has his own best interest at heart.  He obviously does not care about you & your situation once you sign on the dotted line.  Depending on the company he works for...maybe that IS his job..to get those loans & the human factor be damned!

That is a lack of conscience. 

*Where's DallasLoanGuy???  I'd love his take on this.

[DallasLoanGuy]

---

@BungalowMo wrote:

*Where's DallasLoanGuy???  I'd love his take on this.

---

I opined....

The loan officer should have extrapolated a purchase price out of a comfortable payment.

You can give me a purchase price or comfortable payment amount you want.... doesnt matter to me. If you give me a payment, I can give you a loan amount based on that payment.

Loan officer was more concerned about a commission check, obviously