topic Re: With the mortgage processor? in Mortgage Loans

With the mortgage processor?

Anonymous — Thu, 24 Mar 2016 02:00:03 GMT

Ill keep this short, my wife and I got the approved/eligible through automated underwriting, I get a call the next saying it had to go to the processor to get their input on it, give it a week. I can give all of the details but that might take a day to finish, I know our DTI is close to 45% but the real issue is my income. I am salary and commission but my commission is so sporadic I don't believe the LO knows how to deal with it, but my overall income has increased a lot over the last few years and I also just got a 20% pay raise which should put our DTI way under. We are under contract and are due to close in 3 weeks, but I'm a concerned he did not enter my info correctly into the automated system, he really seemed to not have a grasp on how to explain my income. Is it typical for this to go to the processor, then to the underwriter right after an automated approval? I was under the impression that after an automated approval, the underwriter just needs to verify info.

Re: With the mortgage processor?

StartingOver10 — Thu, 24 Mar 2016 11:09:45 GMT

Yes the processor works with the loan officer to collect your docs, order title and appraisal. Communicate with you to get the file ready to submit to the underwriter. There is a lot of work the processor does behind the scenes. This is completely normal.

Re: With the mortgage processor?

Anonymous — Thu, 24 Mar 2016 23:49:42 GMT

Of course like everyone else buying a house, we are anticipating bad news. We provided all of our documents quickly to the LO before we had automated approval, and he told me he did not need anything else to give to the processor. It's only been a few days but I haven't heard a word from them, appraisal hasn't been ordered, we have no good faith estimate (I know it's not called that anymore), and it feels like it is kind of all up in the air. I feel like this is a big game brokers play to keep you committed to them, they dangle the carrot until the very last minute so you really don't want to start with anyone else, any truth to this?

Re: With the mortgage processor?

StartingOver10 — Fri, 25 Mar 2016 11:36:29 GMT

Normally you are provided the Loan Estimate right away (Loan Estimate is the new name for the GFE).

It is NOT typical for a LO to not communicate with you at the beginning of the application process. It is normal for the processor to step in and begin communications with you right away when you agree to go with that lender. Have you notified the lender that you want to move forward with the loan or does he think you are shopping loan providers?

How many days is a "few days"? If you aren't happy with this lenders communication, then find another lender now before you go further into this process. The first part of the loan application is the honeymoon period so this is when you are most happy (other than closing). If you aren't happy now, it is sure to go downhill from here. JMO based on your post.

@Anonymous wrote:
Of course like everyone else buying a house, we are anticipating bad news. We provided all of our documents quickly to the LO before we had automated approval, and he told me he did not need anything else to give to the processor. It's only been a few days but I haven't heard a word from them, appraisal hasn't been ordered, we have no good faith estimate (I know it's not called that anymore), and it feels like it is kind of all up in the air. I feel like this is a big game brokers play to keep you committed to them, they dangle the carrot until the very last minute so you really don't want to start with anyone else, any truth to this?

Re: With the mortgage processor?

DallasLoanGuy — Fri, 25 Mar 2016 15:51:08 GMT

sounds like the loan officer just wants to have income verified and get a second opinion on calculating.

no, automated approval is based on human input data.... if i input stupid data i get stupid results.

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 14:30:35 GMT

I have a lot of concern now, we removed some stupid disputes from our credit and had to do a re score. We realized that our credit went up to the next tier after the fact but the LO did not realize and kept telling me to pay off more cards, etc. to get us to the next tier. I find it absolutely pointless to pay off thousands of dollars more in credit cards in an attempt to try and raise our scores 20 more points and possibly reduce the rate by 1/8? Maybe? He also recommended I buy out my lease to free up some monthly funds, which is probably the worst advice I have ever heard in my entire life. You would have to be the dumbest person on the planet to buy out a brand new lease, crash the car in the morning then bye bye 18k. I have worked with another LO before this who was just clueless and I'm so far into the process I don't think I can look around, **bleep** to do?

Re: With the mortgage processor?

StartingOver10 — Sun, 27 Mar 2016 15:31:41 GMT

Comments based on your most recent post:

Doesn't sound like you are very far along in the process at all so this would be the time to find a lender with a LO that you trust
An auto lease only requires a buy out if you are having DTI ratio issues. What are your ratios? LO's don't mention it without there being some sort of underlying problem - unless the LO is clueless (can't really tell from the info posted)
What type of mortgage are you getting? Conventional? FHA?
Are you currently applying for a mortgage at a big box bank? If so, change now.

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 17:06:57 GMT

We def have DTI issues, we did get automated approval but I have no idea what he used for income. With my recent raise and income in 2015, we should have absolutely no issue with DTI. Initially he based it off of the last 2 year average and we were hovering right at 45% including the new mortgage. I recently got a 20% raise but I am salaried plus commission and the commission is so sporadic and can range from 0-10k in any given month. Since this is a 2nd/vacation home it seems like many people buy with cash and many of the local lenders are not experienced with "obstacles". I know he is not sure how to handle the salary and that is what he is trying to figure out, but he has been doing mortgages for like 28 years, wouldn't he know how to pull this off? I would think logically, if we are 50$ off a month, I'm not paying off my car or all of my debt just 2 CCs in full to gain the 50$ minimums back no? That's not what we are off if anything, just an example.

Re: With the mortgage processor?

StartingOver10 — Sun, 27 Mar 2016 17:20:56 GMT

@Anonymous wrote:
We def have DTI issues, we did get automated approval but I have no idea what he used for income. With my recent raise and income in 2015, we should have absolutely no issue with DTI. Initially he based it off of the last 2 year average and we were hovering right at 45% including the new mortgage. I recently got a 20% raise but I am salaried plus commission and the commission is so sporadic and can range from 0-10k in any given month. Since this is a 2nd/vacation home it seems like many people buy with cash and many of the local lenders are not experienced with "obstacles". I know he is not sure how to handle the salary and that is what he is trying to figure out, but he has been doing mortgages for like 28 years, wouldn't he know how to pull this off? I would think logically, if we are 50$ off a month, I'm not paying off my car or all of my debt just 2 CCs in full to gain the 50$ minimums back no? That's not what we are off if anything, just an example.

Find another lender. If the lender isn't experienced with obstacles then your process will be a nightmare. I have discovered that a knowledgeable, experienced LO makes all the difference in the world in getting a good mortgage with a smooth process. Having said that, not all experience is the same. I have run into LO's like you describe and I do my best to have the buyer shop for another LO at another company. Otherwise you will experience difficulty - just like you are describing.

RECENT EXAMPLE: I had a listing close last month where the buyer went to Chase. Nothing I could do because the buyer's agent tried to get him to another lender and the buyer really wanted to close "with his bank". It was a conventional loan with a large down payment and excellent credit. Chase turned him down for DTI reasons. It took 30 days as they had to go all the way through the underwriting process. The LO was an experienced LO with many years "experience". Yet he did not run the ratios in the beginning - or he failed to understand that Chase's overlays would impact this borrower. In any event, the buyer then went to the buyer's agent's lender (as we tried to get his to do from day 1) and closed 25 days later. There was no DTI problem with the second lender because there were no overlays with that lender for the loan type.

This happens more often then you can imagine. Don't waste your time with a LO that doesn't know how to handle your file.

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 17:33:13 GMT

Believe it or not, I've tried several and this is the most knowledgeable LO I have come across. I understand "Whoa is me I can't get the right LO to handle my 2nd home loan" , im not crying about it, it's not a pity party, I completely get that not everyone can afford a 2nd home so I have no feelings of entitlement or hoity toityness, I'm just an average person trying to invest in something, but still it seems like some of this stuff is really basic math any LO should be capable of figuring out. The few LOs I dealt with before this, I had to point out Fannie and Freddie guidelines they were not even aware of, by the way it's a conventional loan.

Re: With the mortgage processor?

StartingOver10 — Sun, 27 Mar 2016 17:36:12 GMT

I will pm a couple of different LO's at different lenders and maybe you should call them to see what can be done. Both are in high resort type areas where second homes are common.

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 17:39:45 GMT

Thanks, this is OBX, which from what I have researched and discussed is very difficult to get a mortgage on a 2nd home that rents also with only 10% down. Most lenders run besides the local lenders who understand and know how to process it.

Re: With the mortgage processor?

StartingOver10 — Sun, 27 Mar 2016 17:43:43 GMT

It is a very common scenario here - I'm in S Florida where we do a lot of second homes with a rental component (owner uses it during season and rents off season or vise versa).

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 18:09:17 GMT

So do most lenders run because it is not typical and they don't know how to handle them? I have read the 2nd home while being able to rent is a red flag, the land having a high value compared to the property is a red flag, and oddly most homes come furnished which is also a red flag. Just trying to educate myself on this whole thing too.

Re: With the mortgage processor?

StartingOver10 — Sun, 27 Mar 2016 20:24:39 GMT

@Anonymous wrote:
So do most lenders run because it is not typical and they don't know how to handle them? I have read the 2nd home while being able to rent is a red flag, the land having a high value compared to the property is a red flag, and oddly most homes come furnished which is also a red flag. Just trying to educate myself on this whole thing too.

^^^Land value can present a problem. The other two issues are easily handled but that may be because we are in a resort area where there are lots of 2nd home buyers that rent out their homes for limited time periods (seasonal or non-seasonal rentals). The furniture is normally not a big deal because it has zero to very small value in the purchase. If the furniture has any sort of value above a nominal amount, then it is typically handled outside the P&S contract here.

So is your purchase a SFR on lots of land type purchase? Or something else?

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 20:29:42 GMT

It's a sfr, the furniture transfers for 1$, the land typically equals or close to the property value which is strange but that's how it is there, sample land=115, land=105?

Re: With the mortgage processor?

StartingOver10 — Sun, 27 Mar 2016 22:09:48 GMT

@Anonymous wrote:
It's a sfr, the furniture transfers for 1$, the land typically equals or close to the property value which is strange but that's how it is there, sample land=115, land=105?

Well, that is unusual...at least it is unusual in my experience,

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 22:11:48 GMT

Yep, red flag for most and all lenders but I don't understand why?

Re: With the mortgage processor?

StartingOver10 — Sun, 27 Mar 2016 22:16:06 GMT

@Anonymous wrote:
Yep, red flag for most and all lenders but I don't understand why?

I don't know why, maybe the LO's that come to this site can tell us why. Dpeezy? DallasLoanGuy? Shanethemortgageman? Other LO's?

Re: With the mortgage processor?

Anonymous — Sun, 27 Mar 2016 23:01:01 GMT

I have a good friend that does mortgages and wouldn't touch it either, I called other locals in my area and same deal wouldn't touch it