Mortgage Loans

[cinoeye]

We are bulding new home with Ryan, and goimg thru NVR morgage company.

We are preaproved, hous will be done in a 2 months.

Before we close they will pull our scores agian.

If they are up, interest will be the same, if score is down our interest will go up.

As for now our FICO scores are higher than the forst time they pulled.

That is ok and following is the tricky part.

SInce we live with my inlaws, we pay some bills, and also they are puting some money on our account to pay bills for them.

Now NVR sais that is the problem, and thay want the proof of all bills including my inlaws bank statment!?

Are we in trouble and is this normal?

Message Edited by cinoeye on 10-04-2007 05:38 PM

[imducky]

if your scores are better and they are getting goofy threaten them by saying you won't comply and will just obtain alternate financing. i'm just guessing they won't void the contract because then they would be stuck with a house in a market that isn't exactly moving.

[Lady_Scarlet]

They will not void the contract - they will calll you in default for non-compliance with the financing provision.  I'm a Realtor - listen to me - do not play with provisions of the contract - it can get real nasty if you don't understand it completely!   Default = losing your deposit.

You are on a builder's contract (personally, I hate them) - it is skewed totally in favor of the builder.  They can misss delivery date on your home by montha and you have no recourse; however, if you and spouse are in the hospital because of a car accident - they will tell you to get a POA and make settlement or forefit the deposit.

More than likely there  is some nice perk associated with NVR financing the home (like an upgrade allowance, Closing Cost help, etc).

What I will suggest is that you shop them (pull your reports and scores and fax to other lenders or sit down with them - either way) - and get then to give you a ballpark figure (they have it infront of them so it should be pretty accurate ballpark figure) - then get it in writing somehow.

Then go back to NVR and negotiate rate, etc.

So there is no misunderstanding 

YOU MUST COMPLY WITH THEIR REQUEST OR RISK BEING IN DEFAULT.

Message Edited by Lady_Scarlet on 10-04-2007 09:09 PM

Message Edited by Lady_Scarlet on 10-04-2007 09:15 PM

Message Edited by Lady_Scarlet on 10-04-2007 10:49 PM

[Jaust39]

Don't think you can tell them what you will and will not do if you signed a contract!

We are building with Ryan and financing with NVR as well. closing 10/31.

Why are your in-laws putting money in your account to pay their bills?

One of the requirements for a conventional loan is that all funds be your own (Down Payment, Settlement, etc.)  That is why it is a problem.  If you need to borrow money for those items then lenders are wary.  Also you are only required to explain large deposits into your account.  >$1,000.

If your in-laws are making large deposits into your account then it gives the appearance that you are using borrowed funds.  The other thing is NVR should only be looking into your accouts twice, when you start the application and right before settlement.  How do they know your in-laws are making deposits into your accounts if you are 2 months from settlement?

As far as shopping around, Ryan gives incentives for using in house financing (NVR)

If you signed a contract and got a reduced price for those incentives and then you go out and obtain other financing then you have to pay for those incentives, Do I hear Jumbo Loan?

Home Value 431,000

Incentive value, 31,000

Sales price 400,000

if you go outside NVR and finance the sales price is then $431,000

I don't know about your in-laws having to turn over their bank statements but you have to explain large deposits into your account.

They pull your scores before settlement not to adjust the rate, since you should have locked at least 2 weeks prior, but to see if you went out and added any more debt (cars, furniture, credit cards) if so your financing could fall through.

Hope this helps,

Hey maybe we are neighbors.

[cinoeye]

Thank your replay.

My inlaws are not in good health, and we are doing them a favour(as they do to us since we live with them).

We pay with our own money their bills and we pay their bills with their money.

They do not deposit a lot, maybe $400 here $200 there.

We had had a baby and my wife did not work for a mont, and we set a side $2000 in cash that was posted on our account. We did not thell them that we have money on a side and that is our misstake.

We are also geting some gift money from my parents, and now I'm thinking not to put that on our account.

Input of our paychecks, payed bills...makes it even at the bottom line.

We got a 30 YEARS Fixed, 0$.

We are not borrowing any money, and that is exacly what my inlaws will put in the letter to NVR.

Anyhow, since we DO NOT HAVE DOWN PPAYMENT, and + geting money back from the bulider, why do the NVR cares?

WHat do you think now?

Thank you!

Message Edited by cinoeye on 10-05-2007 01:00 PM

[ShanetheMortgageMan]

Read this article, it'll help with some info, working with builders blows IMO, much better to deal with a re-sale situation.  Them re-checking credit right before closing is BS, I'd find a lender who is Fannie or Freddie approved, then your credit is only checked once and it's good for 120 days (at which point an updated credit report would need to be pulled)... what if your score is lower at that point, do you not qualify for the loan and forfeit any earnest money/deposits?  That is a huge risk IMO.  As far as the bank statement issue, add your in-laws to your account and the lender shouldn't have any issue at all.. worst case is that they'll want a letter from all other account holders stating you have equal access to the funds.

A Helping Hand In Builder Disputes

By Kenneth R. Harney
Saturday, November 18, 2006; F01

When home builders behave badly, some of their customers may have an unexpected resource: The federal government's "RESPA police," who say they have become increasingly active in resolving consumer complaints through nonpublic interventions with builders.

RESPA stands for the Real Estate Settlement Procedures Act, a consumer protection law that targets kickbacks and other settlement-related abuses. The RESPA police are investigators at the Department of Housing and Urban Development. They are best known for their splashy public settlement agreements with real estate, title insurance and mortgage industry firms, sometimes involving hundreds of thousands of dollars.

But with no public fanfare, the RESPA police have begun intervening in complaints brought by individual consumers who say builders are unfairly forcing them to use their affiliated mortgage companies. The affiliates' loan deals, the complaints say, typically are more costly than those available from independent mortgage brokers and lenders.

In one case outlined by HUD officials in an interview, a builder canceled a sales contract and seized an $11,845 good-faith deposit when a buyer refused to use the builder's affiliated mortgage company. Under RESPA, builders and others generally are prohibited from requiring the use of a specific lender or title company as a condition of a sale.

HUD officials talked about enforcement operations on the condition that their names not be printed because agency policy requires that they remain anonymous when discussing nonpublic investigations.

According to the HUD officials, after RESPA investigators contacted the builder and gave the company 15 days to resolve the dispute, the builder -- which the officials also declined to identify because no public action was taken -- not only allowed the buyer to proceed with independent financing, but also paid the buyer's lender to lower the interest rate.

In another recent nonpublic intervention, a consumer complained that a builder seized her $10,000 deposit when she refused to accept the loan deal offered by the builder's mortgage affiliate. The affiliate's loan officer "fraudulently altered financial documents," according to HUD, "that would have placed the consumer in a home she could not afford."

In other words, the builder's loan officer allegedly was willing to approve the buyer for a mortgage amount and monthly payments that ultimately would cause her to lose the home to foreclosure. After investigators intervened on her behalf, HUD officials said, the buyer was refunded the $10,000 deposit.

In a case involving incentives dangled by many builders to attract buyers in soft markets, a prospect was offered a "free" morning room addition to the new house. The builder said the addition was worth about $13,500. The only hitch was that the purchaser would need to use the builder's mortgage subsidiary. The builder assured the buyer that the rates, fees and terms offered by the subsidiary were "very competitive" with outside lenders and brokers, according to the complaint.

But when the buyer checked out the competition, he found the subsidiary's fees to be bloated -- a $5,400 "origination" charge, for example -- and far more costly than in the regular market. The buyer complained to investigators at HUD, arguing that the builder was engaged in an intentionally deceptive practice. After investigators hinted at legal action, the builder agreed to waive the $5,400 fee and threw in the $13,500 morning room, too, according to HUD.

Investigators actively are pursuing other nonpublic mortgage-related complaints, officials say, including allegations that builders:

· Raised the prices of homes when buyers declined to use their mortgage affiliates or subsidiaries.

· Required buyers to deposit extra money in escrow accounts if they refused to use the affiliated lender.

· Pushed buyers into using a designated lender with the threat of withdrawing a $5,000 "seller's credit" toward closing costs and also adding $10,000 onto the home price.

If you find yourself in a builder squeeze involving mortgage, title or other affiliates, HUD has some practical advice for you:

· Compare interest rates, loan terms and closing costs of several independent lenders before agreeing to use the builder's affiliate or wholly owned subsidiary. Determine whether the affiliate's rates and total charges are higher than the going market rate and offset any discounts, incentives and upgrades.

· If you intend to use a builder's affiliated mortgage company to take advantage of incentives and then refinance the loan to get a lower rate, be sure that the mortgage note does not contain a hefty prepayment penalty designed to discourage early refinancing.

· Be suspicious of large discounts or additions that are contingent upon using the builder's loan affiliate. Knowing what comparable homes in the area are selling for may help you determine whether the builder is offering a true discount or is simply raising the price of the home before offering the discount.

If you have a complaint involving high-pressure tactics designed to coerce you into using a builder's affiliate, you can call the RESPA enforcement staff at 202-708-0502. Alternatively, you can e-mail hsg-respa@hud.gov. For background on RESPA, visit http://www.hud.gov/.

Kenneth R. Harney's e-mail address isKenHarney@earthlink.net

[Jaust39]

I think that is the point of locking your rate, if you lock, your rate can't change.  Like I said the point of pulling your report before closing is to make sure your DTI has not changed drastically.  Not to check your score.  One of the things that any lender will tell you is do not make any major purchases prior to settlement.  Ryan does not coerce  buyers into using NVR, you only get the incentives if you finance through NVR.  You can finance with whomever you choose.  As long as you can explain away any large deposits you should be fine.  As far as the 2,000 goes just tell them the truth.

[cinoeye]

Thank you one more time.

You are right, we got $10 000 off the house price, as well as 30 year fixed with 0 down.

We already have our rate locked.

I guess, we are just scared because is sounded NVR was not happy with what are we doing.

It was very weird that are so picky about those deposits, like its $10000 and not  $2000.

But noting major changed, we did not make purchase or asked for credit, make same money, and our scores are higher....

I guess we should just relax.

Message Edited by cinoeye on 10-05-2007 02:27 PM

[ShanetheMortgageMan]

Just make sure NRV Mortgage is giving you the best possible rates/terms you qualify for... if you can show Ryan Homes that their preferred lender isn't giving you the best terms you qualify for perhaps Ryan Homes will let you use the outside financing source plus still get the discounts/incentives.  Don't think you are stuck with the builder's preferred lender if you don't like the terms you are offering, while it might be legal for Ryan Homes to only give discounts if using their preferred lender, it's not something that RESPA looks kindly on.

[cwalden73]

When building our house I found the preferred lenders to be very unkind and unprofessional. I got so disgusted I went out to my local branch and picked up a bank loan. Found this process to be much better.