topic Re: overdraft fees in Mortgage Loans

overdraft fees

Anonymous — Sun, 23 Dec 2012 19:22:58 GMT

My husband has some overdraft fees from earlier in the year on his banking statements. Could that cause the underwriter to deny our loan?

Re: overdraft fees

chasmith — Sun, 23 Dec 2012 19:26:28 GMT

It could, or more likely, lead to a request for a letter of explanation.

Re: overdraft fees

Anonymous — Sun, 23 Dec 2012 19:53:33 GMT

How many overdraft fees are we talking about? I've read about poeple's loan getting denied do to overdraft fees, but they literally had like 18 in the past month.

If you have 2-3 over the past year, they may just ask for a letter of explination as to what caused them and what you've done so it doesn't happen again.

Re: overdraft fees

chasmith — Mon, 24 Dec 2012 14:11:12 GMT

Also, be careful of overdraft LOC transfers too. I had to write a LOE for those, even though my LOC could only be accessed by an overdraft or a check - no transfers.

Re: overdraft fees

MrChairman — Mon, 24 Dec 2012 17:57:22 GMT

I have some overdraft fees from this year. I had to write a letter of explanation and heard nothing else about them. I had three for the entire year I think.

Re: overdraft fees

ceejx — Tue, 25 Dec 2012 04:52:21 GMT

@MrChairman wrote:
I have some overdraft fees from this year. I had to write a letter of explanation and heard nothing else about them. I had three for the entire year I think.

same for me, I had 5, I only provided two months of bank statements, but on the statements there was an "overdraft fees ytd" and I had to write LOEs for the amount, a couple were my fault, and 3 of them were reversed the next day... never heard another word

Re: overdraft fees

Anonymous — Thu, 27 Dec 2012 03:53:50 GMT

I've had quite a few overdraft fees. I didn't know that would be an issue. After all I pay for the overdraft protection . All my bills have been paid on time. The bank never has returned a check (that was my rational, now and moving forward, I know better and have taken steps to avoid future overdrafts...but it might be too late for this home closing is my fear. I was preapproved for a home loan. I found the home I wanted, negotiated the price. Everything was going great. My broker said everything looked great. The appraisal was ordered and came back several thousand above what I am (hopefully) paying for the house. Then he asked for my bank statement. This being Dec it showed exactly how much I have shelled out this past year due to overdraft charges. He first thought we should wait until my next bank statement comes out which would be around the middle of Jan. Then he said he had spoken with an account rep who said it shouldn't be an issue if I write a letter of explanation. I've done that but waiting to hear... This is so nerve racking. Anyone have any thoughts about my chances of actually closing. Btw, its a USDA guaranteed loan if that matters. Also, this may not be relevant to this topic but my real estate agent set the closing date for the end of this month but my broker has said from day 1 that it would be more than likely mid Jan before I could close. Now, I guess that's if I get to close. If anyone can offer any insight it would be greatly appreciated. Obviously, I don't know much about buying a home or the closing process.

Re: overdraft fees

Anonymous — Thu, 27 Dec 2012 20:18:15 GMT

My LO has assured me that the overdraft fees aren't a problem. I am in underwriting as we speak. I will let you know when I hear anything. I'm praying that an LOE wil take care of it. Mine is also usda guaranteed.

My real estate also set our closing for Dec 28. My LO said mid Jan. Fortunately our seller is willing to wait. My LO has said usda turn around is 2 weeks at this point.

Our appraisal is scheduled for Monday. Praying that is turns out in our favor.

Good luck!

Re: overdraft fees

Anonymous — Thu, 27 Dec 2012 20:24:44 GMT

Also, you can have a VOD done instead of bank statements. Although once it has been seen by the underwriter it is probably too late for that option. You could speak with your broker to find out.

Re: overdraft fees

Anonymous — Thu, 27 Dec 2012 23:11:42 GMT

Thank you. My broker did have me get a VOD from my bank. But I still had to turn in the bank statement and write a letter of explanation. I'm keeping my fingers crossed but I do stress about it quite a bit. I will keep my fingers crossed for you too and anyone else going through this closing process. Its awful! I'm sure it will be well worth it to those who get to cross the finish line. Keep us posted on how yours goes and I will do the same.

Re: overdraft fees

Anonymous — Thu, 27 Dec 2012 23:15:32 GMT

My broker said the turn around here for USDA was around two weeks also but that it possibly could take an extra week. Ive not heard from him at all this week so I assume he is off for the holidays. Best of luck to you!

Re: overdraft fees

Anonymous — Fri, 28 Dec 2012 02:43:01 GMT

Did I mention I've had a lot of overdrafts? Not just a few. I think I had 17 for the year. Even I was shockd at how much I has spent on them. I'm so worried.

Re: overdraft fees

Anonymous — Fri, 28 Dec 2012 02:57:00 GMT

Wow that is quite a bit. Why were there so many? Can't change it no obviously but maybe to help so it dorient happen in the future.

Re: overdraft fees

Anonymous — Fri, 28 Dec 2012 03:21:14 GMT

I got promoted on my job but that promotion keeps me away from home quite a bit. My employer doesn't offer direct deposit. I couldn't get to the bank to deposit my pay checks on time but I did pay all my bills on time. I thought it was better to pay the overdraft fees than pay the bills late. I also ended up finally opening a new checking account in the town I work in. Its never been overdrawn and I have finally figured out how to connect both accounts so that I can now transfer money from one account to the other. Plus, I have left a check from the new bank with a relative in my town who can at any time deposit it for me if needed and just today I found out I can get email alerts from my main checking account if my balance falls below a certain point. The thing is my original bank gets an automatic deposit each month from another source of income I have so we had to use it. I need that income for my mortgage as well as the income from my job. I'm in panick mode, seriously. I just never realized it would be an issue. I feel so stupid now, after all the hard work Ive put into building my credit back up.

Re: overdraft fees

Anonymous — Fri, 28 Dec 2012 03:57:02 GMT

With a letter of explanation you should be ok. Make sure you tell them what steps you are taking so it does not happen again. Have they already asked you to write a letter?

Here is a good link on how to write a good (and bad) letter of explanation: http://underwriternotes.com/category/letter-of-explanation-2/

Also, I don't know who you bank with but many of the banks now allow you to deposit checking by taking a picture with your smartphone. Maybe that is something that can be useful for you since they don't offer direct deposit.

Re: overdraft fees

Anonymous — Fri, 28 Dec 2012 15:07:13 GMT

My broker asked me to write a LOE just before the Christmas holidays. I believe he is off this week since I havent heard from him. I have sent several letters. I told him to pick which one he thought would work. He is very good about things like that. I had to write am LOE about my addresses. I technically dont live in the town I work but I do recieve mail there (like my pay check) and since I had opened a checking account in that town I had to explain the address. But he assured me that wouldnt be an issue. He hasnt assured me on the overdrafts.

Re: overdraft fees

Anonymous — Fri, 28 Dec 2012 15:10:02 GMT

Also, I'm not sure if my bank offers that with a smart phone or not. I dont have a smart phone but I could certainly get one if they did have that option. I'm still using a "dumb phone." lol.

Re: overdraft fees

tooleman694 — Fri, 28 Dec 2012 15:34:17 GMT

Wonder what the UW thinks if you hit overdraft and it pulls from savings. I have a couple over drafts this year when I wasn't paying attention to my account and it pulled from savings.

I typically keep my checking account pretty low, but have a crap ton in savings just to seperate my money. Id have no over drafts if I just kept all my money in my checking.

Re: overdraft fees

chasmith — Fri, 28 Dec 2012 15:51:06 GMT

It was my experience that even if it is sensible management to keep funds in savings or unused LOC and have overdrafts covered, UW don't like it. You might consider keeping an extra cash cushion in checking until you close.

Re: overdraft fees

Anonymous — Fri, 28 Dec 2012 16:14:54 GMT

So do you think because UW's don't like overdrafts that will prevent me from closing? My middle score is TU 660 (lender pulled). I have zero balances on all credit cards. I have 4 credit cards reporting with no lates. My oldest one is only 3 years old and the newest is only 4 months old as Ive been in rebuilding mode. I did have a small balance on one cc when my credit was pulled for the home loan though. Ive since paid it off and don't intend using any of my cc's till (IF) after I get to close. The house payment would be about 100.00 less than the rent Ive been paying. I have one negative on two reports which is an old medical bill from 2009 that I haven't any knowledge of. Ive disputed it, offered a pay for delete and they wont budge. My broker said that wouldn't be an issue at all though and not to worry about it. Its for 97.00. I told him I could pay it off and he said not to do that. In fact, he said everything was great, going along very smoothly. Then he discovered the overdrafts. I know Ive already stated this some place but at first he said we should just wait until my next statement comes out in mid Jan. Then he said to get a VOD from my bank which I did. Then finally he said he had spoken to an account rep who said it should be okay if I wrote a letter of explanation and what actions Ive taken to prevent this from happening again. I did that but since I believe he is still off on holiday...Ive not heard a word back. What do you think my chances of closing are? Could someone explain what he meant by speaking to an account rep? I'm assuming thats someone with the uw's but not sure.