topic Re: Mortgage Denied.. in Mortgage Loans

Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 17:18:09 GMT

I found out this morning that our mortgage was denied because the credit report indicates that an account of ours was closed in April 2010. It was actually closed in September 2009 because it had been 60 past due in June 2009. I called the credit card company this morning and spoke with them and they indicated that they would send a letter stating that the account was closed in Septemeber 2009 and that we have been in good standing and paid more than the minimum payment due since September 2009.

Has anyone else experienced this and have you had a good outcome? I am really upset right now.. My husband wasn't working last year (he had just graduated) and now with him working our income has tripled so it's frustrating..

Thanks.

Re: Mortgage Denied..

ShowCredit — Tue, 20 Apr 2010 17:34:23 GMT

Phillygirl,

Sorry to hear about that. It hasn't happend to me but I am hoping that when the letter is sent, you can get the mortgage.

Good luck.

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 17:42:11 GMT

Wow, I'm sorry. I wish I had knowledge to ease your mind but in this case I don't. It's classic of creditors or collection agencies when they get wind that you're mortgage shopping. Hopefully it will end well! *Crossed fingers*

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 18:40:42 GMT

I am so sorry I do not understand why it was denied though, it was denied because you have a closed credit card?

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 18:48:22 GMT

It was denied becuase the credit report indicates that a credit grantor closed our account April of 2010. I received the letter from the creditor indicating that we closed it in September 2009. I was told that in order for the loan to be sold on the secondary market it doesn't look good to have an account closed by the credit grantor in such a recent time frame.

I am hoping with the new letter the UW will change their minds.

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 18:52:09 GMT

oh no! What type of mortgage are you going for? What were your Credit scores and did you have reserves if you dont mine me asking. Secondary market?

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 19:32:10 GMT

It's an FHA loan. I was told by my LO that the loans are usually sold on the aftermarket. My scores per myfico.com is TU 637, Equifax 636 and per Experian.com Experian is 648. My husbands scores are per my fico.com TU 656, Equifax 642 and per Experian.com 663. Our dti is right near the qualifying amounts and we have 3.5% cash needed to close the loan and about 30K in 401k's and stock options assets. When we purchased our first home in 2001 we had an FHA loan then and I remember it getting sold even before we closed on the house so it made sense to me.

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 19:36:05 GMT

Then im screwed becauwe BOA closed one of our cards in march right after we paid it off in full, we were never late except once in feb of 07.... who are you working with, is it a broker or a bank?

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 19:56:06 GMT

Jgk2383 - Our account was actually closed because of a late payment that occured in June of 2009. My husband had just graduated and had not found work and some additional factors played into the late. I called to make arrangements to cure the arrears and we were put into a payment plan and I made all the necessary payments. Now fast forward to yesterday when my loan was being reviewed by an UW. it was denied because of the fact that we had an account closed by the grantor listed as April 2010. But after calling the bank I received a letter indicating that the account was indeed closed in September 2009. Which is what I was looking for.

I wish you luck on your BofA card. I had a couple of cards that were paid off in 2008 and closed a few months later. It irritates me that the credit companies can do that. You pay the bill off and they hit your credit.. Good luck to you.

Re: Mortgage Denied..

Anonymous — Tue, 20 Apr 2010 20:27:12 GMT

So sorry to hear about the denial! I hope that you are able to get an approval with that letter. I am about to go into underwriting shortly and have a closed account. I had it closed back in July of 2009 because they tried to change my interest rate from 5.9 percent to 20+ percent. Hopefully that will not cause any issues. I am in the Philly area as well, assuming you are by the name. If you dont mind me asking, did you go with a local bank or a larger financial institituion for the loan. Sending good vibes your way!!!! I know I may need it soon!

Re: Mortgage Denied..

happy0510 — Tue, 20 Apr 2010 21:16:01 GMT

Sorry to hear about that!!

Can any of the mortgage pros step in on this one?

This is new to me....never heard this on the boards in 3+ years!!

Re: Mortgage Denied..

Anonymous — Wed, 21 Apr 2010 17:56:08 GMT

Either the OP is not giving us the whole story or there is some kind of miscommunication. Account closed by credit grantor happens all the time and should not affect your mortgage.

Re: Mortgage Denied..

Anonymous — Wed, 21 Apr 2010 18:12:34 GMT

I gave the whole story.. It was denied because it was listed on the credit report as closed by grantor April 2010. My LO explained to me that it was a huge red flag for underwriting. I have submitted a letter explaining that it was closed in September of 2009. I am hoping that will help.

Re: Mortgage Denied..

Anonymous — Wed, 21 Apr 2010 18:48:06 GMT

AlthoughI wish the best for you in it, in reality it still falls in the past 12 months which is why it is a red flag. If the compnay closed your account in the last year due to payment issues, it is still going to be a red flag. Either way, best wishes for getting it resolved.

Re: Mortgage Denied..

Anonymous — Wed, 21 Apr 2010 18:52:03 GMT

This doesn't make sense to me. What if the account was closed due to inactivity? Go find another lender.

Re: Mortgage Denied..

Anonymous — Wed, 21 Apr 2010 19:17:23 GMT

Tha account was closed due to lack of payment. The underwriter can probably see that the accunt was behind, closed, and then put under payment plan. In all likelihood, the exact reason for denial was not for account being closed, but for the fact that less than a year ago OP was seriosuly delinquent enough for a company to close the account. Usually you have to be a t least 2 months past due for them to close an account (although they may CLD for even a day late or really any reason they choose)

Re: Mortgage Denied..

happy0510 — Wed, 21 Apr 2010 19:25:41 GMT

Awwe. Now this makes sense! I re-read the OP.

Inactivity and perfect history with any given CC being closed by grantor is not going to result in denial.

Thank goodness!

Re: Mortgage Denied..

Anonymous — Thu, 22 Apr 2010 04:50:42 GMT

@Anonymous wrote:
Tha account was closed due to lack of payment. The underwriter can probably see that the accunt was behind, closed, and then put under payment plan. In all likelihood, the exact reason for denial was not for account being closed, but for the fact that less than a year ago OP was seriosuly delinquent enough for a company to close the account. Usually you have to be a t least 2 months past due for them to close an account (although they may CLD for even a day late or really any reason they choose)

Yes you are right, they can close for any reason they feel is necessary. I had a CCC close my account because I went over the credit limit "CL" two months in a row, even though I made payments to bring the CL down before the month's closing date and never missed a payment. I would purchase gas, usually $30 - $40 worth even though I knew I only had $15 or so avail credit. Just trying to get by having enough gas to make it to payday.....

wow, just reading it makes me sound desperate but thats where i was over a year ago. I'm still paying on this closed account got it down to $150 now....yippppeeeee