@Anonymous wrote:I have been trying to get my home loan for about 3 weeks now. I have a very old Chapter 13 bankruptcy that was discharged about 13 months ago. I have provided the mortgage company with almost everything they could possible want copies of W2's, Income Tax Returns, Pay check stubs, credit report, certificate for home ownership class. I was told by the loan officer that I was pre-approved. I therefore went house shopping and am under contract to buy my first home. I did not realize that the pre-approval came from the loan officer and not the underwriter so now I'm nervous.
The loan officer called back and said that they now need my complete bankruptcy file. When I submitted the loan application I provided the discharge papers for the Chapter 13 along with a printout from the National Data Base which shows all creditors and the payment history. I gladly faxed them the information but now I'm worried. Why would they want that when I gave them the printout from the Trustee?
At the time of the application after the pre-approval was issued and I signed about 30 different forms the loan officer said my credit score was about 684 and she thought things would go smoothly. Do the loan officers really know what the underwriters will approve? Do they run your credit through automated underwriting and if passes issue the pre approval then send file to underwriting?
This is a VA loan with 3.5 interest rate. I thought the interest rate was because of the bankruptcy but she said it was based on my credit score. 3.5 does not seem so high so do you think the credit score is good enough?
That's how pre-approvals work; typically (in most situations) there's no full UW pass done on it.
Your credit score isn't an issue, 684 is solid for most typical mortgage programs but getting documentation for negatives is common practice and sometimes it needs to be in the right form or right source in addition to being the right information. This isn't a cause for concern, vis a vis my own UW wanted extra documentation regarding my $2967 lien that was paid years ago and marked as such on my credit report on all 3 bureaus, and when we were talking asset declaration even after the downpayment orders of magnitude above that.
Wasn't a cause for concern, even if it was a bit absurd from my consumer POV though I'm sure it was to make certain I didn't have to pay it at closing or whatever similar to an active collection for some lenders (and liens are a great deal worse from a banks perspective), that's just standard procedure for mortgage UW.
As for their worth, it's not a full UW approval or anything close, but the fact is without the piece of paper from a lender (assuming you're not paying cash for the property) your file is going to get kicked to the curb by the seller and their agent, so I would suggest it's worth a great deal.
You're probably fine, and if something comes up deal with it, but don't sweat it it's just a horrifically detailed procedure.
