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Waiting for Underwriter Approval... help me understand the new FHA way of thinking!

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Anonymous
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Waiting for Underwriter Approval... help me understand the new FHA way of thinking!

This is our second home purchase.  Another FHA loan.  We sold our first house last month at a loss ($20K)... it was not a short sale... we supplied the deficit equity at closing (half with our savings and half with a credit line).  We are preapproved for $30K more than the price of the house we made an offer on.  It is all under my husband's name who has a 713 credit score.  We made every mortgage payment on time, but there are some 30day lates on a few low balance credit cards (which were later paid in full).  Also, I just turned in a ton of bank statements to the underwriter and noticed that one of them showed an overdraft of $451 pulled out of our savings (which at the time had nearly $15K).  Other than that I can't think of anything negative... we were relocated to our new location which is why we accepted a loss on the sale of our house. Some of the down payment funds are gifts (since we drained our savings on the sell).

 

Should there be any problem I should be prepared for as the underwriter looks over our information? 

 

We have been living with family the past 6 months and are so close to finally getting on our own again, but I am very worried due to all the negative news I hear about the housing, mortgage and banking fields.

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3 REPLIES 3
DallasLoanGuy
Super Contributor

Re: Waiting for Underwriter Approval... help me understand the new FHA way of thinking!

fha hasn't changed as far as qualifying... just the fico requirements.

expect to explain the overdraft if they cant do a vod to get around it.

 

Retired Lender
Message 2 of 4
Anonymous
Not applicable

Re: Waiting for Underwriter Approval... help me understand the new FHA way of thinking!

Is an overdraft a deal breaker or just an item that requires additional paperwork and further explanation?  Everyone keeps telling us we'll be lucky to get a loan because banks are tightening their belts and being very picky on who they loan to.  We don't have a perfect score or history but (in my eyes) we seem as good a borrower as any... I find it hard to believe that banks are being that picky.  We're working with Wells Fargo who seems to still be doing well and they were the lender of our first mortgage as well.
Message 3 of 4
ShanetheMortgageMan
Super Contributor

Re: Waiting for Underwriter Approval... help me understand the new FHA way of thinking!

Generally for NSF/overdraft's, underwriters may require explanations for any NSFs found on an applicant’s bank statements, but generally will not require an explanation for an isolated incident. An isolated incident may be that loan file where there is no evidence of problems with cash flow (such as late payments on credit accounts) and there is one or more NSF shown on the applicant’s bank statements in the past 60 days. When review of the loan documents indicates cash flow difficulties and there are 2 or more NSFs in the last 60 days, the applicant’s written explanation will be required.  A VOD, like DallasLoanGuy mentioned, only shows the name on the account, account number, when it was opened, and current balance + 60 day average balance, and does not show day-by-day transaction history.
Message Edited by ShanetheMortgageMan on 10-14-2008 12:27 PM
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