topic Re: Declined at underwriting in Mortgage Loans

Declined at underwriting

Anonymous — Wed, 25 Apr 2012 02:08:24 GMT

I recently was turned down for a home loan at final underwriting. I was prequalified and told the loan officer I had alot of medical collections on my credit report. He pulled my report and said they weren't an issue. I started looking for a house and made an offer that became a n accepted contract. I had a home inspection and radon inspection done out of pocket and started packing when the loan officer called and told me that because of the medical collections they couldn't help me and to try again in six months payments on the medical. I now have less than a month til closing and no financing. Anyone know if there's anything I can do?

Re: Declined at underwriting

Booner72 — Wed, 25 Apr 2012 02:15:22 GMT

Are they paid?

How Many?

When was the most recent collection put on your reports?

What are your scores?

How much are they in total? A new FHA law was going to come out April 1 that said if you have collections that total 1000.00 or more, they all need paid, but I believe that was delayed for a few more months. It's possible that the lender you used put that into practice as their policy.

Who was your lender?

Please start researching PFD (Pay for delete) and GW Deletions (Goodwill deletions) and even HIPAA, though you don't have time to do that if you need a loan in a month.

Re: Declined at underwriting

Anonymous — Wed, 25 Apr 2012 02:25:25 GMT

They are not paid. My middle score is 637 and it is around 17000 total with almost all being 3 to 6 years old. My problem is that the lender knew about them when I applied and told me it wouldn't be an issue because they were medical. I don't understand why I'm finding out it is an issue when I am supposed to close. It was for a VA loan with first step mortgage.

Re: Declined at underwriting

Booner72 — Wed, 25 Apr 2012 02:32:38 GMT

I'm so sorry. I know exactly how you feel. I lost a house AFTER closing...after I had the keys! So I know your pain.

However, 17K is a ton of money and you are, as I'm sure you know, at risk of being sued by any of those collection agencies for the collections that are not past the SOL in your state - (you should probably research that).

I think you will either have to PFD them off or wait until the CRTP and the SOL passes and they are no longer on your reports.

Yes, I absolutely agree that your LO should have ran this by someone before you got this far into the process.

ETA: but don't do what I did! Don't just let your credit go to pot bc you can't get a house right now. Continue to take good care of it.

Re: Declined at underwriting

Familywantsahouse — Wed, 25 Apr 2012 10:02:24 GMT

I'm so sorry. depending on their age, I would frantically be offering a "pay for delete" scenario for a percentage of what's owed on them.

I've gotten 4 medical baddies deleted since 2/24, all for a percentage (25-60) of what was owed.

They were all older, though.

Re: Declined at underwriting

Anonymous — Thu, 26 Apr 2012 01:48:36 GMT

@Booner72 wrote:
I'm so sorry. I know exactly how you feel. I lost a house AFTER closing...after I had the keys! So I know your pain.

However, 17K is a ton of money and you are, as I'm sure you know, at risk of being sued by any of those collection agencies for the collections that are not past the SOL in your state - (you should probably research that).

I think you will either have to PFD them off or wait until the CRTP and the SOL passes and they are no longer on your reports.

Yes, I absolutely agree that your LO should have ran this by someone before you got this far into the process.

ETA: but don't do what I did! Don't just let your credit go to pot bc you can't get a house right now. Continue to take good care of it.

+1, all well-said.

Re: Declined at underwriting

Anonymous — Thu, 26 Apr 2012 01:56:25 GMT

Like Booner said: Just keep working on rebuilding and repair.

I'm really surprised at the LO, though. $17K in collections is just a lot. I really wouldn't have applied under those circumstances or believed him/her.

Re: Declined at underwriting

Anonymous — Thu, 26 Apr 2012 19:12:03 GMT

I was working with the lender for several months before I even applied for a loan. I was told that the medical collections didn't matter and I just needed to bring my credit score up. I did everything they told me to do and brought it up. I am currently trying to secure financing through vamortgagecenter.com and they told me as long as the medical collections are under 20k I should be ok. I hope so since I am under contract and have already paid for a home inspection and radon inspection. We will see.......

Re: Declined at underwriting

Anonymous — Thu, 26 Apr 2012 19:27:57 GMT

Booner72, how did you get denied AFTER closing? That's freaking insane! Now I'm getting really scared, I'm in UW and so far I haven't heard anything NEW that bad. I'm just curious to see if it's something that might happen to me. Thanks!

Re: Declined at underwriting

chan85 — Thu, 26 Apr 2012 22:46:20 GMT

@Anonymous wrote:
Booner72, how did you get denied AFTER closing? That's freaking insane! Now I'm getting really scared, I'm in UW and so far I haven't heard anything NEW that bad. I'm just curious to see if it's something that might happen to me. Thanks!

yes please answer that!? i almost choked when i read it!

Re: Declined at underwriting

kjm79 — Thu, 26 Apr 2012 23:42:04 GMT

OP, you may also want to check out veteransunited.com and talk to their loan specialists. They supposedly also have a departement that provides free advice and assistance on repairing credit for active military and vets. Might be worth looking into. I haven't applied for a VA mortgage from themt, but they have been very helpful with answering qualification and eligibility questions. Their min required score was 620.

Re: Declined at underwriting

Anonymous — Fri, 27 Apr 2012 03:02:55 GMT

I believe veteransunited and va mortgage center is the same company. They are being very helpful and seem to think I should be ok with getting approved with them. I hope so.....

Re: Declined at underwriting

kjm79 — Fri, 27 Apr 2012 14:40:49 GMT

@Anonymous wrote:
I believe veteransunited and va mortgage center is the same company. They are being very helpful and seem to think I should be ok with getting approved with them. I hope so.....

Ok. Good to know, they have completely separate websites. Good luck.

Re: Declined at underwriting

Booner72 — Fri, 27 Apr 2012 21:26:02 GMT

@Anonymous wrote:
Booner72, how did you get denied AFTER closing? That's freaking insane! Now I'm getting really scared, I'm in UW and so far I haven't heard anything NEW that bad. I'm just curious to see if it's something that might happen to me. Thanks!

First there's closing. Then there's FUNDING. So before they funded, they ran a credit report and the new judgment was there. We didn't even know it was coming. The washer/dryer was delivered, I was pregnant "out to here" in the house unpacking, and got the call. Nearly threw up. My 3 year old yelled at our realtor "You're taking our house away!!"

So really, a person can't breathe until the loan FUNDS. Ask for table funding, so you fund at closing.

T.R.A.U.M.A

(The judgment was from the child support division. They found out we were buying because we had to get all the statements of on time payments. he had paid on time FOR YEARS, but owed arrears from when the ex girlfriend filed for support and LIED saying he never lived with them, but in fact, he had lived with her and took care of the baby til baby was three, and even put exgirlfriend through dental tech school with his own money. I hate that lying _________ and I will never forgive her and totally blame her for this. The Child Support Division rep told me when I called to get the statements "You're not buying a house." I was like (YES I AM, ..........whatever.....she got me).

Re: Declined at underwriting

Anonymous — Sat, 28 Apr 2012 03:31:45 GMT

See that scares me. I don't think my loan funded today (didn't mention anything about it). I was going to app for a better credit card so I can ditch my rebuilders, but now I feel like I should wait.

Re: Declined at underwriting

webhopper — Sat, 28 Apr 2012 04:18:21 GMT

@Anonymous wrote:
See that scares me. I don't think my loan funded today (didn't mention anything about it). I was going to app for a better credit card so I can ditch my rebuilders, but now I feel like I should wait.

You should wait at least 30 days after closing... sometimes the lender does a post-closing audit, and they'll pull your report again... If your file doesn't pass the audit, you get to hand your keys back... its important that you don't run up credit card bills or apply for new credit to get furniture etc. during that time frame.

Do without the mattress and curtains if you have to... I hear wal mart has a great deal on inflatable queen size air mattresses And Goodwill always has sheets to hang on the window for privacy! I know that's ghetttoooo with a capital G, but its better than handing back your keys!!!

Re: Declined at underwriting

Booner72 — Sat, 28 Apr 2012 15:38:42 GMT

@webhopper wrote:
@Anonymous wrote:
See that scares me. I don't think my loan funded today (didn't mention anything about it). I was going to app for a better credit card so I can ditch my rebuilders, but now I feel like I should wait.
You should wait at least 30 days after closing... sometimes the lender does a post-closing audit, and they'll pull your report again... If your file doesn't pass the audit, you get to hand your keys back... its important that you don't run up credit card bills or apply for new credit to get furniture etc. during that time frame.

Do without the mattress and curtains if you have to... I hear wal mart has a great deal on inflatable queen size air mattresses And Goodwill always has sheets to hang on the window for privacy! I know that's ghetttoooo with a capital G, but its better than handing back your keys!!!

With all due respect, I do not think you should give people this advice. I have never heard it from anyone else. Once the title is recorded at the county and the loan is funded, then a person is safe. We are all on hold with our credit for months going through this process. So once it's over, sometimes new credit is needed, most often WANTED Desperately.

My loan officer even told me that I could go get credit after the house funded.

Re: Declined at underwriting

Anonymous — Sat, 28 Apr 2012 15:43:31 GMT

I was told the same. After loan was funded I could get furniture etc.

Re: Declined at underwriting

Anonymous — Mon, 30 Apr 2012 16:26:36 GMT

Gray and Booner, I heard the same thing. Once closing and funding was established we're in the clear. I spoke to my loan officer and she said my loan was funded the same day (last Friday). I was hoping to get furniture this past weekend, but that 30 day thing gave me pause. I dont Need to finance my furniture since I have plenty of cash, but I rather hold on to my cash as a just in case.

Re: Declined at underwriting

Anonymous — Mon, 30 Apr 2012 16:38:17 GMT

I've never heard of waiting 30 days to apply and obtain new credit. I closed last week and when it funded and we were on record, two days after I went to Home Depot to finance on new appliances. LOL. I even got a $1,000 credit credit at Walmart for curtains and blinds. My LO said to wait till everything funded and we are on record to start applying for new credit. He never mentioned about an audit after closing and funding. After everything funded, we even got our refund from escrow for $2000 which was the earnest money we had put in when we first went into contract. Oh please tell me about the audit after closing being incorrect because I really don't feel like handing back my keys