topic Re: Confused about my loan status and what I read on here about FHA loans. in Mortgage Loans

Confused about my loan status and what I read on here about FHA loans.

waterfallwishes — Wed, 29 Oct 2008 04:29:42 GMT

I know its long so thanks for reading

Ok , so I have read all the posts back to early august and now I am a little confused.. First a little about me ..House is short sale they paid 137 a year ago , did lots of upgrades tried to sell for 199 for 6 months before short sale ... We offered 100 and the sellers bank countered at BPO ,110.We have 11K for down payment and closing costs .. Since it is a short sale seller does not have funds to pay any closing costs.. We accepted 110 and are waiting for it in writing from the bank to move forward .......

Credit scores 623 - 635 - 619 .. Middle was 617 when I started all this ...They were a little lower but raised a little when I paid off my student loan .... Make 42000 a year fiance makes 38000 a year .. Debt is car note ( 420)and rent (400 for my part ).. My fiance is on loan app - his scores are in mid 670 - 690 .. One is even 710 I think.. He has car ( 320 )- rent ( 400 his part) - and a student loan ( 80 ) .. He has one collection that he is disputing from 6 years and 10 months ago that has not been a problem .. I have 2 med coll from 3 years ago and one other thing ....

The other thing is causing problems .. I co Signed ( I know ... Bad move..shame on me ) so they filed chapter 13 and as part of the bk had to turn the car in .. Lender says that want proof from the bank GMAC that they are not collecting on me and that the car note is in bk .. Called GMAC and they say that they cannot send me anything in writing until bk plan is finished .. It is a 5 year payment plan ..... Lender says this may hold up the FHA loan .. Will this ultimately stop the loan ?

I have had three lenders .. One pre approved and then now will not call me back , another said they are working on it but it is taking long because of this and another said he did not think he could get it through and I would have to go to final underwriting and find out at the end, I would hate to pay out for inspections and all and then they say no .....All wanted the med bills paid and wanted letter from GMAC .. I got copies of bk showing the vehilce in it .. I do not get why med bills need to be paid but they are small .. Can this other thing stop me from getting the loan ? I could not have kept the car and paid the loan if I had wanted to because the court made them turn it in .... Worked so hard to get a good deal on the house now I am worried .Very first house .. I have worked so hard to save and pay off all student loans and CC and now I still can't get my house ? Any help ?

Message Edited by waterfallwishes on 10-28-2008 09:29 PM

Re: Confused about my loan status and what I read on here about FHA loans.

BrianB_The_Loan_Professor — Wed, 29 Oct 2008 04:38:14 GMT

have broker send in yourstuff to be UW now and add the property later

Might be too late but short sales drag on so you may find out your answer before paying anything out.

I can see that judgement being a HUGE issue?

Good Luck

Brian

Re: Confused about my loan status and what I read on here about FHA loans.

KLGFCG — Wed, 29 Oct 2008 04:48:34 GMT

Someone more versed in this stuff will come along, but my first thought would be to see if your fiance can get the mortgage without you. I make a little less than he does (with no current debt) and was preapproved for $120K. He doesn't have significant debt (BTW, rent isn't included in DTI since you'll presumably be replacing that with a mortgage payment, although as I understand it, your current rent can sometimes be used as a compensatory factor for going a little higher on the front end ratio), so I don't think it should be a problem unless that collection comes up as an issue. Since all the "fix-it" stuff is on your side, maybe ask about taking yourself out of the equation and just letting him carry it.

Re: Confused about my loan status and what I read on here about FHA loans.

BrianB_The_Loan_Professor — Wed, 29 Oct 2008 04:58:11 GMT

Good Point if his income is 3k + a month and only debt is 400 for SL and car he could probably swing this

who has the down payment?

Re: Confused about my loan status and what I read on here about FHA loans.

waterfallwishes — Wed, 29 Oct 2008 14:53:44 GMT

Thanks for reading everybody ! Ok , the thing about fiance is he has only been at his job 1 year and 8 months .and past jobs are less then 1 year .. I have been at job 5+ years and same area for 10 years . The down payment is just about split between us .. He has slightly more in savings then I do .. One said that they will send it in with a mock address to see what happens and the other two will not ....

As for the short sale .. My agent called this morning and said it is going so fast , she never seen a short sale go so quick .. We submitted offer last week of sep and now are just waiting for final approval in writing after we acepted the counter offer last Thursday.

The other weird thing is that even with both of they only prequailifed us for a little over 130 .. Not that I needed any more but is it because of our income that they did that or due to the fact that we said we were not comfortable paying more then 125 for a house .. We do not want to Max out and get over our heads ..... Current rent 800 .. Proposed mortgage 1000 - 1100 I will ask if they think they can do it with him alone ....

Brian ..

Did you mean that you can or cannot see that being a big issue ?

Re: Confused about my loan status and what I read on here about FHA loans.

Anonymous — Wed, 29 Oct 2008 16:09:10 GMT

Hi there~!

You would be surprised at what your partner may qualify for on his own. I was able to qualify on my own with Suntrust for an FHA loan. I had a $412 auto loan, two small credit cards, and that's it. I don't make a great deal more than your partner, and the home we are buying is more expensive...you should ask your LO to run the scenario and see if they can it it through.

The BK is going to cause issues for sure. Unless you can get a court ruling or paperwork from the creditor that you are not responsible, it is going to haunt you.

Hope this helps at leat somewhat--we have been in loan purgatory for 10 weeks, so I feel ya!

Lisa

Re: Confused about my loan status and what I read on here about FHA loans.

waterfallwishes — Wed, 29 Oct 2008 16:18:56 GMT

So you think the Bk , even though it is not my own will be a big problem ? It was three years ago but they have 2 years left on thier re payment plan and noody will give me anything until they finish the plan .... Thanks

Re: Confused about my loan status and what I read on here about FHA loans.

ShanetheMortgageMan — Wed, 29 Oct 2008 16:44:39 GMT

Your fiance should be able to qualify for this purchase on his own. His debt to income ratio is decent, he has good scores, and his employment shouldn't pose a problem either.

So you have two ways to go about it - either with your fiance alone or going with a lender who would be OK with accepting the BK documentation as enough evidence that you are not responsible for the car loan. If they stopped making payments on the BK plan, would you be responsible for the remaining balance on the car loan? That is what the underwriter's biggest concern is, they don't want the car loan (which is probably significant) to turn into a judgment if they can't finish their BK payment plan, as a judgment could potentially be attached to the title of your home.

I think the easier route to go would be to just try and get approved with your fiance. If loan officers aren't willing to try it that way then drop them because they probably didn't want to work with you in the first place. The one who said they could do the approval with your fiance with the "TBD" address sounds like a good one.

Re: Confused about my loan status and what I read on here about FHA loans.

BrianB_The_Loan_Professor — Wed, 29 Oct 2008 16:57:54 GMT

@waterfallwishes wrote:
Thanks for reading everybody ! Ok , the thing about fiance is he has only been at his job 1 year and 8 months .and past jobs are less then 1 year .. I have been at job 5+ years and same area for 10 years . The down payment is just about split between us .. He has slightly more in savings then I do .. One said that they will send it in with a mock address to see what happens and the other two will not ....

As for the short sale .. My agent called this morning and said it is going so fast , she never seen a short sale go so quick .. We submitted offer last week of sep and now are just waiting for final approval in writing after we acepted the counter offer last Thursday.

The other weird thing is that even with both of they only prequailifed us for a little over 130 .. Not that I needed any more but is it because of our income that they did that or due to the fact that we said we were not comfortable paying more then 125 for a house .. We do not want to Max out and get over our heads ..... Current rent 800 .. Proposed mortgage 1000 - 1100 I will ask if they think they can do it with him alone ....

Brian ..

Did you mean that you can or cannot see that being a big issue ?

I meant that can be an issue not the BK but the car situation

How is it reporting on your credit?

If it is a judgement FHA will require it to be paid if not then a good letter of explanation and any documents that can back it up may work. It basically comes down to the UW. You signed that you would be responsible if they defaulted when you co signed so it is hard to say for sure what an UW will do with it.

If you go with just him and you have half of the down payment it may be a little tricky - do you have a joint account where the money is held?

Good Luck

Brian

Re: Confused about my loan status and what I read on here about FHA loans.

Anonymous — Wed, 29 Oct 2008 17:11:58 GMT

This is probably a hugely Dumb-O question, but if she can't be on the loan (because of the BK and car issue) why can't she "gift" her part of the downpayment to the fiance?

Or would that be too much of a conflict of interest?

Re: Confused about my loan status and what I read on here about FHA loans.

ShanetheMortgageMan — Wed, 29 Oct 2008 17:21:36 GMT

@Anonymous wrote:
This is probably a hugely Dumb-O question, but if she can't be on the loan (because of the BK and car issue) why can't she "gift" her part of the downpayment to the fiance?

Or would that be too much of a conflict of interest?

That's perfectly fine to do.

Re: Confused about my loan status and what I read on here about FHA loans.

BrianB_The_Loan_Professor — Wed, 29 Oct 2008 17:44:03 GMT

Shane is right I had to go back and look at the guidelines regarding Gifts

they say

A Gift for the down payment and closing cost may come from sources such as: family member, close friend, borrower’s employer or labor union.

I have always used family and forgot about the "close friend" part

you should be fine

Re: Confused about my loan status and what I read on here about FHA loans.

ShanetheMortgageMan — Wed, 29 Oct 2008 18:08:57 GMT

I was in a situation recently where a gift was coming from someone's godfather. To prove they had a "close friendship" we came up with the idea of providing photos of the co-borrower and godfather together at various points in their life. We also had to get a copy of the godfather's drivers license to prove that was actually him in the pictures. Close friendship is tough to prove, but in a fiancee/fiance situation I'm sure you could come up with something (engagement ring receipt, deposit receipt on wedding/reception site, etc.).

Re: Confused about my loan status and what I read on here about FHA loans.

waterfallwishes — Wed, 29 Oct 2008 18:42:28 GMT

Thanks for the ideas ... on my credit it shows charged off ....

Re: Confused about my loan status and what I read on here about FHA loans.

ShanetheMortgageMan — Wed, 29 Oct 2008 18:49:04 GMT

It doesn't say included in BK?

Re: Confused about my loan status and what I read on here about FHA loans.

waterfallwishes — Wed, 29 Oct 2008 19:23:27 GMT

Nope .. says volunteer repo .. Then charged off .. Called gmac and they said that they cannot speak to me until it is done and right now that are not trying to collecting anything from me.. Got a paper from BK court and it shows that the vehicle was filed in BK but I guess that they did not respond in time because they are getting nothing in the monthly payments .. a month after they filed a revision to be included in the 20 repayment plan but the judge said no - the the primary borrower budget is maxed so now I am guessing that they are included in the bk but are not getting anything so after the bk is done now they will start coming after me right ? They say with all fees balance is up to 10k .. it was 6k before all this from what I see in all these papers from bk court ...

Re: Confused about my loan status and what I read on here about FHA loans.

ShanetheMortgageMan — Wed, 29 Oct 2008 19:25:51 GMT

Why did the BK issue even come up? Most lenders who offer FHA wouldn't require it to be paid off. Did you have to write an explanation for it or something?

Re: Confused about my loan status and what I read on here about FHA loans.

waterfallwishes — Wed, 29 Oct 2008 19:30:30 GMT

They wanted it setteled and explained or a letter stating that they are not collecting from me .. when I called GMAC to see where the loan stood that is when they said they could not give me anything .. so I sent my explination that I was a co sigenr on a loan and the primary borrower filed for BK .. per the plan they had to turn the vehile in ... so now here we are ...

Re: Confused about my loan status and what I read on here about FHA loans.

ShanetheMortgageMan — Wed, 29 Oct 2008 19:40:51 GMT

Appears they didn't like your explanation. So what do you want to do, proceed with trying to fight the lender to allow you to be on the loan without having to pay off the charge-off, or proceed with just your fiance qualifying for the home?

Re: Confused about my loan status and what I read on here about FHA loans.

waterfallwishes — Wed, 29 Oct 2008 19:47:07 GMT

I do not mind going with just my fiance at this point .. I am not looking to fight with any one over this .. just really trying to understand where I am at .. Plus GMAC said they are not alloed to take any money from me right now .. the one company that is going to underwriting with a TBD address took my explanation and then came back and asked for proof of the BK , they said it is going in front of a panel and to expect atleast a week to review... .. I guess I just panicked and worried that despite all the hard worked I had messed up my chances for our home .. Thanks for all your help !

Message Edited by waterfallwishes on 10-29-2008 12:47 PM