Ok so here it goes.......My wife applied for a fha 203k loan she was preapproved. So we found a house we wanted to purchase and made an offer. The realtor accepted our offer and then we negotiated the contract. With the contract signed we then approached are Loan Officer everything from then on has been a nightmare. The home we decided on purchasing is a foreclosure property just so I didn't let that info out. The first problem was her debt to income ratio. O and by the way I believe her score that was used by wells Fargo was a 697. But anyways she had to consolidate all of her college loans in order to supposedly get the final approval for the loan. Well it didn't end there the LO stated we could have a contingency fee held from our escrow / repair account for the plumbing and electrical systems due to the home being empty for 3 years. After about 3 weeks the LO contacted us and stated the appraiser / inspector was at the home and he would not sign off on the final appraisal due to these two utilities not being on and in working order. At this point we are 2 weeks away from our projected closing date which was June 18,2011. So now we had to contact the utility company's and get the water and electric turned on and in working order. After a few set backs with both we finally managed to get the appraisal finished. With our new closing date of July 5,2011 we were getting excited due to our LO telling us that everything was going great and things are in underwriting. Well you guessed it the 5th of July rolls around and they are dodging our phone calls.........The next day the LO calls and states the underwriters didn't like a few things and needed better documentation. They then gave us a new closing date of July 22,2011. It is now July 26th and still no house. All needed documentation was received and the LO said everything looked good on Friday July 22nd and we would be looking at closing on Monday. We get an email on Monday stating there is a problem with our contractor now and they are trying to resolve it. Now to the contractor on July 1st the LO said that everything was good to go with the contractor and that was one less thing we had to worry about. SO WHAT IS EVERYONE'S OPINION ON THIS....ARE THEY GIVING US THE RUN AROUND OR IS THIS NORMAL WHEN IT COMES TO FHA203K AND FORECLOSURES?????? Any help will be greatly appreciated.
Your experience usually only occurs when the consumer/borrower decides to work with people who have not been 203k educated or do not have 203k experience. This includes the Realtor, LO, contractor, inspector, appraiser. I hope you properly interviewed the lender, contractor, inspector, Realtor regarding their 203k knowledge and/or 203k experience. The 203k has a few more moving parts compared to other loans, which is why trained, educated and/or experienced 203k Professionals should be used.
From what I understand about Wells Fargo is that their LO's that do 203k's are required by Wells Fargo to specialize in and only do renovation loans and so are the processor and underwriter. Typically Wells Fargo does a decent job with 203k's but nothing is perfect.
A 203k Consultant should have done a Feasibility Analysis or at least the home inspection or an FHA Compliance Inspector (not the appraiser) should have done the home inspection and detailed all requirements that are needed to bring the property up to HUD/FHA standards, including providing info on the utilities. Since the home inspection is typically done during the firs 7 days in escrow, this most likely would have eliminated the "utilities surprise" you encountered right away and not 3 weeks into the process.
The problem with the contractor could have been avoided if the LO would have properly vetted the contractor at the beginning, but most LO's don't even do that. Also, most LO's do not even educate contractors on the intricacies of the 203k and just hope for the best. Using a Certified 203k Contractor can be a viable option and typically prevents contractor issues, but Wells Fargo has some of the most strict criteria for contractors. You should find out what challenges the LO has with the contractor.
I just finished a 203k with Wells, and for the most part was a piece of cake. Teh contrator I chose was already certified by Wells. we received the first draw right away and within 2 weeks after work was finished, received final payment. Our loan officer was great and was available through the entire process
I have a full 203k and I'm wondering how up-front your LO was with you to begin with. How long did they say they needed for closing to start? Mine made me ask for 60 days. I actually switched mortgage companies after my offer because my 203k ended up needing some structural work, so it was disqualified from the streamline despite being less than 35k in work. It is standard to have a contingency on a 203k, as well, and it's higher if the utilities aren't on at the inspection. Since I was originally trying to co-ordinate an assistance program that I'd managed to qualify for with the loan etc, I had been doing a lot of follow-up all around before I ended up with my LO. When I switched to her, she'd get daily updates and questions from me. She was the right LO for me because she ANSWERED them PROMPTLY and to the best of her ability and she was honest if she didn't know something or had been mistaken about something and got updated info. Also, getting the proper forms to my LO from my contractor was a giant pain - she'd ask for stuff, he'd think she didn't need it because the other banks he'd worked with hadn't asked for it, then he'd slack off on getting it to her or get it incomplete, etc. (Yeah, I should have gone a different direction with him). In any case, I would start emailing the LO every day and ask what they need from you next and what the next step is and what the barriers are that remain. I would try to make it more "let me know what you need and what to expect" than "**bleep** IS WRONG WITH YOU WHY ISN'T THIS DONE".
To answer your questing the LO was not up front at the begging at all. (as IM now finding out) The LO and the processor both through out this process made this sound easier than what it is. We have heard that everything is good to go a hundred times but then the next day they need something else. Also they gave us the same time line of 60 days which was very untrue as you can see we still aren't closed and our original closing date was 6-18-2011. Now the latest with them is that everything is good to go now the property and the title my wife's credit is all good. They call today and say that the UW doesn't like the bid now because they think there is structural work being done. In the bid it states nothing about anything structural being done. The UW must not have any knowledge in the housing and building industry due to not understanding the bid. Their main confusion is that there is an additional upgrades section to the bid that my contractor added due to not coming close to the amount of renovation money we were approved for. In this section he has the addition of a porch roof to the front deck. There is no existing roof there. What they noticed in the bid was the wording the joist will be supported with joist hangers. Now they want my contractor to redue the bid and specifically state that there will be no structural work to the existing home.
I had about 90 days to closing total, but less than 60 from when I switched banks. The new one made me ask for an extension and we beat it by a week. I drove her a little nuts cause I kept trying to give her stuff she didn't need yet...but I also got her any new thing she needed from me in 5-10 minutes at the most.
You might want to consider if you want to find another contractor - it worries me that he'd write it up so that they'd question the structural nature. It may not be the worst thing to go full 203k over streamlined, but most 203k lenders don't do the full, so that could be an issue.
The worst nightmare I couldn't have ever imagined! My expecting wife and I had a nice house picked out, a foreclosure. It needed a new well, septic and we wanted a high efficiency furnace. We had to go with wells fargo due to the fact they are supposedly the only approved 203k bank in Michigan. Our offer was quickly accepted and we went under contract within a couple weeks. Our loan officer at Wells Fargo said the process should take about 45 days until close which put us into Aug. for a closing. This was just in time to move in before our new baby arrived and to have a home for my wife to nest a bit. We had good renters lined up to take over our condo where we still live. Contractors set up with bids and appoval papers finalized by July. Nothing has gone right. The LO lost paper work. We had to submit our financial proof twice, property line surveys twice, zoning clearances for a garage eve which overhangs the neighbors lot line 6 inches and numerous other details. I have had to call the health inspector uncountable times to write special letters regarding the new septic system plans (which he drew), The zoning director to write letters verifying the survey of the lot and the landscaping details (which are getting torn out when the septic goes in). Finally in Aug. they got around to the appraisal and they said I need to get another contractor to fix some dings in the house siding and paint a window sill. I am a construction worker and was going to fix them myself but Wells Fargo said I had to get a contractor ( $45.00 of work for me now costs $975). Wells Fargo made me pay for a well water test on a well we aren't going to use. HUD claims they stopped requiring well tests unless there is a reason for concern (landfill, fracking etc.) I paid $200 out of pocket for that. All the surrounding wells are pure w/o and concerns. I needed to have neighbors' written permission to have a new septic system be built. Once in underwriting it take months to hear back. Aug, Sept. October, Our file has been in and out of underwriting. Paper work is sent back because the address of missing an "S" for south or the contractor signed the bid but the initials aren't on the top of the next page (there isn't a line to even initial) paperwork is sent back and forth 4 times over 5 weeks to get initials or tiny changes on various sheets. Each time we responded within a couple hours with their request and Wells Fargo took days or weeks to get back. I have been furious with them for 5 months now. The LO reported to be in constant contact with the underwriter but then this past Friday we were told by the LO we were closing. He, oops, didn't know the underwriter had the day off. Not even an apology. What the hell! 7 months have gone by. 6 months of the time have been diddling with tedious crap that should have been consolidated into one day. Now we figure that we'll get to close on Monday, nope. The LO didn't realize the underwriter was off for an extended weekend. We have had 5 closing dates and still have not closed. The latest closing date in gone by and we file for an addendum. Closing date #6. We should close this week. Nope. The LO now recommends that we should get another underwriter who will need time to review the file and this should take a couple weeks, Holy Hell! We asked why? His advise was that the present underwriter will be back on Wed. and he (the LO) will be gone on Thurs and can't give us the attention needed to close. We have been put through so many more major inconvenience than I can detail in this forum, turned away many great renters, messed up our contractors schedules with false start dates, had a baby now and have no nursery, packed moving boxes and unpacked and repacked and unpacked, had to buy firewood for the winter, ground is freezing and the septic and well bids will be void, etc, etc. I am crazy furious with the calloused, ineptitude of the clown running this loan. I wouldn't even let my son cash his change jar with this circus of a bank. Our real estate agent has never seen mismanagement on this level and the entire agency says they will STRONGLY recommend that their clients never finance with Wells Fargo. 8 months will go by before we might close. Christmas for my new baby and wife will be a passing nightmare. It still isn't over. Don't ever deal with Wells Fargo!