topic Re: Emergency Mortgage Question in Mortgage Loans

Emergency Mortgage Question

Anonymous — Fri, 02 Nov 2018 13:35:41 GMT

Hi all, I don't want to make this as long as it really should be.

We are going through a FEMA buyout on our current house/mortgage due to hurricane harvey being the 7th flood. The delays from working on the government's timeline has put us in a serious situation. We were under contract and in order to save it, and all of our earnest money, we signed a temp lease with the seller of our new house. We were approved through UW and all set, and then months and months of delays has caused our credit reports to expire so LO said he needed to run again. We did not expect that and have been financially strapped due to unrelated issues (gaining custody of 2 kids and still paying $1000/mo in child support being one of the major issues which as of today is now resolved, and paying utilities on two houses), so we had been relying on our existing credit to help us stay afloat. It turned out that my husband had two scores (TU & EX) drop to 618 (we needed 620), and EQ much lower like 580. So, in our rebuilding experience previously, 2 points was NOT a difficult jump therefore we thought this would a simple resoultion.

LO's simulator said we needed to pay off our 2 lowest balances, which we did. Then there was an issue with the quick rescore and/or EX not reporting the balance as 0. That took a week to sort out. He ran our credit again, and neither 618 score moved. So then LO's simulator told us to pay down a chase CC by half, which we did as well. Today LO got a notification that they were updated so he ran the reports again. TU went to 625, and instead of EX increasing, it dropped to 605. LO escalated with factual data and just heard back: apparently today, November 1st, EX changed their scoring model which caused the score drop.

We have been under contract since June, and the seller has been extremely understanding about our buyout situation not going as planned and it being beyond our control. But we've been extending our lease for 3 months now. Tomorrow we will have to ask for another extension.

At this point we are so defeated.

We are running out of time, money, and options. I don't know that I have 100% faith in LO's simulator seeing as how the first payoffs didnt do anything. His utilization is high, but we cant realistically pay everything off right now. What would be a good first step...paying all down a bit, or trying to get one paid off completely?

Please help! So desperate

ETA additional info for him only as my #s are still good

His take home is ~$1400/week and I don't know if this is relevant but every few months he may have to go offshore for a week or two, in which those checks wind up being ~$3200/week.

account	balance	limit
lowes	5156.48	6000
best buy	2873.99	3000
freedom	2809.84	3000
amazon	2078.49	2200
slate	588.99	1200
care credit	908	6000
kay jewelers	0	4800
acu	0	1000
home depot	0	500

loan	balance	payment
nissan	25469.37	526
chase auto	19368.98	383.14
credit union loan	3957.85	161

Re: Emergency Mortgage Question

CreditInspired — Fri, 02 Nov 2018 01:41:27 GMT

We need more info.

Number of CCs, including loans.
CLs and outstanding balances.
Loans and outstanding balances.
Vehicle(s) monthly payment.
Income

Re: Emergency Mortgage Question

Anonymous — Fri, 02 Nov 2018 04:44:04 GMT

Good luck with everything and sorry for your unfortunate circumstances. Hopefully one of our knowledgeable contributors chimes in here shortly. Helping the thread stay fresh.

Goodluck again,

Re: Emergency Mortgage Question

Anonymous — Fri, 02 Nov 2018 13:36:33 GMT

@CreditInspired wrote:
We need more info.

Number of CCs, including loans.
CLs and outstanding balances.
Loans and outstanding balances.
Vehicle(s) monthly payment.
Income

Edited original post with requested info...thank you!

Re: Emergency Mortgage Question

CreditInspired — Fri, 02 Nov 2018 21:59:10 GMT

OP

As you said, these are extremely high UTs. 4 cards are maxed out so your monthly bills must be pretty high. And then there are the vehicles and loan.

You said what your husband’s take home pay, but what is both your total monthly gross incomes—not net. What is the total minimum payment for all your CCs? And then there’s the $1K child support.

Honestly, I don’t want to sound dismal but the DTI ratio may be a problem even if your scores were higher.

Re: Emergency Mortgage Question

Anonymous — Fri, 02 Nov 2018 22:48:53 GMT

Thank you for your response. Our DTI is only an issue if we cant get his middle score back up to 620 from 605.
The child support just stopped, Monday will be the first paycheck without garnishment.
The total of his minimum payments including cars is about 1600/mo. My own cards <$300/mo
His projected gross for this year is $115,000
Mine $41,000

Re: Emergency Mortgage Question

homeloanexpert — Sat, 03 Nov 2018 12:28:14 GMT

Not enough info to help you. What is your current DTI? Or answer these questions:

PITI payment?

Sales price?

Loan Type?

Re: Emergency Mortgage Question

Anonymous — Sat, 03 Nov 2018 16:56:52 GMT

$2600/mo on our closing estimate
SP $312000
FHA

Re: Emergency Mortgage Question

DollyLama — Sun, 04 Nov 2018 13:48:55 GMT

How much in funds do you have available if you have to scrimp to knock down the balances?

Mortgage scores react to utilization and number of cards reporting a balance. I can see where just paying off the two small ones did not do anything as far as crossing a threshold on utilization.

Aim is to get overall utilization to UNDER 28.9% of your total credit line, and reduce at minimum less than 50% of cards reporting a balance.

Re: Emergency Mortgage Question

Anonymous — Sun, 04 Nov 2018 22:16:57 GMT

We have limited funds right now, we just stopped paying child support and bills on 2 houses, plus the $1500 last few weeks that we spent paying what LO told us to.
Any large payoffs would have to come after the close on the hurricane house, hopefully in the next week or so, but we wanted to try to find out if we could do anything sooner.
We have rebuilt our credit before while being subscribed to myfico and scores would fluctuate by a few points on any given month let alone paying off/down a few things. So I was under the impression that mortgage scores pretty much reacted the same way. In my reading about utilization, I thought that tiers existed which penalized more or less, like 89+, 88-69, 68-49 etc...with the good spot being like <30%. Is this not the case? It's just <30% is green and anything else is red?

Re: Emergency Mortgage Question

Anonymous — Sun, 04 Nov 2018 22:26:05 GMT

Does the overall utilization <28.9% include all accounts such as vehicle & personal loans? Or solely credit accounts?

Re: Emergency Mortgage Question

DollyLama — Sun, 04 Nov 2018 22:35:38 GMT

The thresholds are from bad to good 88.9 not 89, 68.9, 48.9, 28.9 and 8.9% (Biggest score bumps come with the last two 28.9 and 8.9), must account for added interest on balances that are carried that will be reported. It affects overall scores, but creditors also look individually, example the Best Buy and Chase are in the danger zones where there is a possibility of adverse action, especially if only making minimum payments and carrying a balance continually, that they will balance chase you (reduce your credit line as you pay down, thus being maxxed out constantly), or worse close the account while having a balance. You want to avoid these at all costs, as both will always affect your overall utilization.

Re: Emergency Mortgage Question

VALoanMaster — Mon, 05 Nov 2018 17:10:46 GMT

@Anonymous wrote:
Thank you for your response. Our DTI is only an issue if we cant get his middle score back up to 620 from 605.
The child support just stopped, Monday will be the first paycheck without garnishment.
The total of his minimum payments including cars is about 1600/mo. My own cards <$300/mo
His projected gross for this year is $115,000
Mine $41,000

Hi Happysamiam2,

So your lender requires a 620 score or better for FHA?

Why does the DTI become a problem for you if you score is 605 instead of 620?

Re: Emergency Mortgage Question

Anonymous — Mon, 05 Nov 2018 17:13:34 GMT

@VALoanMaster wrote:
@Anonymous wrote:
Thank you for your response. Our DTI is only an issue if we cant get his middle score back up to 620 from 605.
The child support just stopped, Monday will be the first paycheck without garnishment.
The total of his minimum payments including cars is about 1600/mo. My own cards <$300/mo
His projected gross for this year is $115,000
Mine $41,000
Hi Happysamiam2,

So your lender requires a 620 score or better for FHA?
Why does the DTI become a problem for you if you score is 605 instead of 620?

I don't know the answer to that. He said if he has to qualify under 620 that the DTI would have to be lower than it is now.

Re: Emergency Mortgage Question

VALoanMaster — Mon, 05 Nov 2018 17:27:03 GMT

did the LO tell you what your DTI is?

You might have a lender with some conservative overlays that are making things more difficult than they need to be.

Re: Emergency Mortgage Question

Anonymous — Mon, 05 Nov 2018 17:41:45 GMT

@VALoanMaster wrote:
did the LO tell you what your DTI is?
You might have a lender with some conservative overlays that are making things more difficult than they need to be.

52%

Re: Emergency Mortgage Question

VALoanMaster — Mon, 05 Nov 2018 17:55:49 GMT

@Anonymous wrote:
@VALoanMaster wrote:
did the LO tell you what your DTI is?
You might have a lender with some conservative overlays that are making things more difficult than they need to be.
52%

Ok so do you know if the LO was able to get your loan approved with the current scores through an Automated Underwriting System(AUS)?

What I'm trying to do is determine whether or not you have an actual issue or if the problem is with the lender/overlays.

If your file is approved through an AUS with your current scores & DTI, then the issue is with the lender but if your file is not approved through an AUS then you have a problem.

Here's what I mean.

If your file is not getting approved through an AUS then that means the loan has to be manually underwritten. When this happens, lenders/secondary market investors apply additional overlays to the standard guidelines. Here are a couple of examples.

1) I can do FHA & VA loans down to a 580 score a couple of the investors that I sell my loans to require a 620+ score on loans that require a manual underwrite.

2) The investors will cap your DTI to on a manual underwrite even though FHA will go as high as 56.9% with an approval through an AUS. I have some investors that will only allow a 43% max DTI & have some that will go as high as 50% but that's it.

Does that make sense?

Re: Emergency Mortgage Question

Anonymous — Mon, 05 Nov 2018 18:01:08 GMT

This makes sense, yes. Thank you for explaining so clearly.

I don't *know* but am going to make an uneducated guess and say manually, because in his last communication LO said that UW will need to review paperwork to clear a condition (end of child support).

Re: Emergency Mortgage Question

VALoanMaster — Mon, 05 Nov 2018 18:47:29 GMT

@Anonymous wrote:
This makes sense, yes. Thank you for explaining so clearly.
I don't *know* but am going to make an uneducated guess and say manually, because in his last communication LO said that UW will need to review paperwork to clear a condition (end of child support).

You're welcome.

I would ask the LO to make sure. An u/w will have to review paperwork either way.

Re: Emergency Mortgage Question

Anonymous — Mon, 05 Nov 2018 19:25:20 GMT

@VALoanMaster wrote:
@Anonymous wrote:
This makes sense, yes. Thank you for explaining so clearly.
I don't *know* but am going to make an uneducated guess and say manually, because in his last communication LO said that UW will need to review paperwork to clear a condition (end of child support).

You're welcome.
I would ask the LO to make sure. An u/w will have to review paperwork either way.

Go figure, my uneducated guess was incorrect LO said no to manual UW