topic UW Disappointment in Mortgage Loans

UW Disappointment

ShowCredit — Mon, 06 Dec 2010 18:12:58 GMT

Preapproved for a mortgage for over a year. Found the home, offered on a short sale. Offer accepted with condition that I use a local bank, because I was using my work CU from LA and I am in Fla. Preapproved with local bank, paid for appraisal, inspection, went to underwriting to close next week, only to be told today that they cannot do the loan, because after bancrupcy has been discharged for the past 7 years, I got a mortgage and had some lates.

I had lost my job and was on unemployment, also it was an adjustable mortgage, so the rate went up and I could not afford to pay it with unemployment.. The house was sold and paid off, more than 3 years ago. I told the loan officer, but she said even if I wrote a letter it would still not be approved.

I am so disappointed, I am going back to my credit union to see if this can be salvaged and if I can close soon.

TU 12/3/2010 - 716

EQ 12/3/2010 - 701

Re: UW Disappointment

Anonymous — Mon, 06 Dec 2010 18:23:10 GMT

Sorry for the disappointment.

When file BK most lenders want a perfectly clean report since the BK with no missed payments, and or negative activity.

Re: UW Disappointment

Anonymous — Mon, 06 Dec 2010 18:50:42 GMT

numerous mortgage lates post BK is going to be a tough one no matter who is doing the loan. BK stays on for what... 10 years now?

Was there any other lates at the same time, or just the mortgage? How long did the delinquencies last (1 month, 6?) What was the furthest behind you got? etc. Do you have ample reserves (4-6 months or mortgage payment in reserve)? What DTI are you shooting for?

The bottome line is a mortgage late is a serious issue in and of itself but with a past BK still showing and especially if it ever went over 60 days late then it will be hard. Even more so if DTI limits are running tight and there are few reserves. They need those type of comensating factors (reserves and low DTI) to take the risk on someone with past BK AND post BK mortgage lates. That it was over 3 years ago helps BTW, but a loan like this, they are looking for anything to say no to, as oppossed to a clean file where they are looking for a reason to say yes.

Re: UW Disappointment

ShowCredit — Mon, 06 Dec 2010 23:44:44 GMT

The mortgage was the only late on my CR and that was 3 years ago. I had lost my job, so it had 120 days late even though I paid it evey month, until the house was eventually sold and paid off. I have enough money in reserves and DTI is ok. I went to another lender and they said to write a letter explaining all the lates, so I am working on that to see what happens.

My credit scores have also increased a lot, the only other thing is my car payment which has been paid on time for the past year and a half.

Re: UW Disappointment

Anonymous — Tue, 07 Dec 2010 00:33:03 GMT

120 days late on a mortgage is the same looked at the same as a foreclosure for buying/refi purposes. That alone would cause you to need 3 years since the last late for consideration. Follwed a few years after a BK and it would easily be a deal killer. I wish the best for you, but it is going to be really tough to get this approved. IT is the type of file alot of LO's will push through because they think they can get it worked out (and a couple years ago they could have) but everyone is being really picky now and any lates post BK are tough. 120 day mortgage lates post BK are going to be a deal breaker to most banks.

Re: UW Disappointment

ShanetheMortgageMan — Wed, 08 Dec 2010 19:04:26 GMT

Unless you are applying for a VA loan, I have my doubts you have been pre-approved for a mortgage over a year. Over a year ago it sounds like the 120 days late payment would've been within 3 years, disqualifying you from FHA & conventional financing. I think your CU didn't look too closely at credit, hope that's not the case but that is what it sounds like.

Re: UW Disappointment

chasmith — Wed, 08 Dec 2010 19:29:35 GMT

They don't move fast, but you might want to try NACA.