UPDATE --Need to vent - now what ?

[Anonymous]

Sept. 5 house went on the market - perfect place- nothing fancy-just a little house- got a showing - submitted mortgage info on Sept 27. - pre-approval letter on Sept. 28-purchase agreement in on Sept 30-accepted agreement on Oct. 1-good faith deposit on Oct 2.-private home inspection on Oct.6-deposit to bank for there appraisal Oct 13- appraisal ordered on Oct. 15 - appraisal done on Nov 1 -DENIED by underwriting on Nov 10.  Credit scores are 656-684-665 tried for USDA rd loan. The underwriter just didn't like the application she said - bk7 will be 3 yrs old in Jan 2011 - we have auto loan, personal loan, and A credit card, we opened and transferred credit card balance for engagement ring to lower interest rate. BUT according to her we have not e-established credit - HUH ? We don't want any un-necessary credit -the dti was very good- we pay rent of 425 new payment would of been 457 - oh we are just crushed and don't know what to do - our local loan officer is basically in shock- because she has seen worse get a mortgage - what are we doing wrong- we have done everything they asked us to. Any suggestions for her in northern Michigan would greatly be appreciated - it was denied by the underwriter - it didn't even get to USDA office.

[ShanetheMortgageMan]

How long has the auto loan, personal loan and credit card been opened for?  At least 12 months each?  Are you able to document you pay $425/mo in rent by providing the cancelled rent checks from your bank?

What is the housing portion of your debt ratio, and total debt ratio?

Lenders that offer USDA have become more conservative in the wake of their guarantee fee changes.  Loans that would be borderline approved before underwriters aren't comfortable with.  I suspect it's because USDA was absent for so long, the secondary market appetite for USDA loans waned, and so they have less investors purchasing them and therefore are making sure the files are stronger to avoid having an unsaleable USDA loan on their books.

If your housing ratio is within 29%, and your total debt ratio within 41%, and the 3 trade lines you opened post-BK have been going on for 12 months, and you can document your rental history... I personally think you should be able to get approved, it just depends on getting the right underwriter or not.

[Anonymous]

Yep, we can supply cancelled checks for rent.  The credit card, auto loan, and personal loan are just over 2 years old.  Debt total - c.c./auto/personal loan total $215 a month. House payment would be 460. Gross income is 3440 a month - housing expense would be 997 total debt 1410. I  know the loan officer said we were very good on the dti. We just have a thin credit file as they put it.

[ShanetheMortgageMan]

Yes the debt ratios appear to be within qualifying levels - it all comes down to just finding the right underwriter/lender.  It may take a few times but I certainly thing you could qualify.  Chase is pretty good with USDA, if you haven't tried them I'd give them a call.

[Anonymous]

Thank You Shane !!!   I did try our local Chase bank (20 miles away)  was informed by there mortgage officer they have NOT done any RD loans in over 3 years. Tried another local bank listed on the approved lender list - but no one has returned any of my calls or e-mails.  Drove 45 miles to another lender on the list - walked in plopped my file down - and the wonderful lady said "Yes, we can do this"  She was ordering a water n well test yesterday 11/19 - she's hoping to be able to use the appraisal that we had already paid for - now just waiting to hear from RD.  The whole thing should take 2-3 weeks.  So hopefully I'll have my house for Christmas. I'll keep you informed.  Thank You again.

[ShanetheMortgageMan]

Welcome.  But never apply for mortgages at a branch because as a general rule the loan officers at a banking branch know very little about mortgages, branches are there for doing very simple transactions like opening a checking account, starting up a CD, etc.   Most banks have a national mortgage center or an actual location that solely handles mortgages which you call into.

[Anonymous]

Loan Officer received RD commitment on Tues. 12/28 - We are closing at 3 p.m.  today  --  HAPPY NEW YEAR TO US IN OUR NEW HOME !!!! -  Our closing costs are as follows :You will not need to bring in anything to close.  I had included the RD guarantee fee into the loan amount and you will actually be getting some funds back at close.  YEAH 

[ShanetheMortgageMan]

Congrats!

[Anonymous]

Happy happy new year! Congrats on the new home!