Denied FHA Loan after being pre-approved

[jsavino]

I worked with a local bank and got pre approved for 400k fha. They sent me a pre approval letter and said start shopping. I then gathered and sent all info they required to verify and everything was going ok. Then i got a call from the broker saying the under writter is saying there are 2 late payments on 12/13' and 01/14 and they have to be removed before loan is approved. I called capitol one and they said they dont take off late items from my report. My question is can i try applying with a larger bank ? like wells fargo? and have a better chance of being approved? or what do i have to do to get this resolved? Here is some info on me:

lowest credit score is 644

income is 110k a year

bankruptcy discharged 09/10'

dti is under 30%

down payment between 15k-20k

[frugalQ]

i'm guessing the lender/broker issued a pre-qual and not a pre-approval....this should have come to your attention at the very beginning of the mortgage process.  the issue is the fact that there are lates after a discharged bankruptcy.....that's a no-no for a lot of lenders.  You should contact a mortgage lender (not necessarily a box bank) and give them your specifics.  Be sure to tell them upfront about the lates after bankruptcy because that will surely determine how the rest of the conversation goes.

if you are using a broker, is he/she shopping your mortgage around to other lenders?

good luck!

[Anonymous]

I'm not sure why it would be an issue as long as they weren't both mortgage lates. Lates on cards and installment debt should not automatically disqualify you (per FHA guidelines) as long you have the credit score to qualify (unless they have tight overlays).

[frugalQ]

I've always heard that any lates after a bankruptcy is frowned upon...whether it's mortgage or not.  

[Anonymous]

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@frugalQ wrote:

i'm guessing the lender/broker issued a pre-qual and not a pre-approval....this should have come to your attention at the very beginning of the mortgage process.  the issue is the fact that there are lates after a discharged bankruptcy.....that's a no-no for a lot of lenders.  You should contact a mortgage lender (not necessarily a box bank) and give them your specifics.  Be sure to tell them upfront about the lates after bankruptcy because that will surely determine how the rest of the conversation goes.

if you are using a broker, is he/she shopping your mortgage around to other lenders?

good luck!

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That exactly - See blue.

[Anonymous]

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@frugalQ wrote:

I've always heard that any lates after a bankruptcy is frowned upon...whether it's mortgage or not.  

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I've closed my fair share of FHA loans with plenty of lates and other derogs post-BK.

Some lenders may have tight overlays, but it is still very possible.

[frugalQ]

Yes, I'm guessing it's lender specific also...that's why OP should lay it all out in the beginning when talking to other lenders.

[jsavino]

Thanks for all the replies everyone. I am pretty sure it was a pre approval.My broker told me the differences between a pre qual and pre approval. What the lender was working on was the approval so my realtor had more of a bargaining tool. I had signed like 40 papers and broker went over everything stating final price would be adjusted depending on house and taxes and said i would have approval in a week. That is when the underwritter denied the loan. My broker had pulled my report and knew about the lates even asked me what happen and said it shouldnt be a problem. I just wanted to know if it was going to be a problem at every bank or what banks can anyone recomend. thank you

[Anonymous]

I sent you a private message

[DallasLoanGuy]

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not the 1st time someone came along referred this guy on their 1st post

they even avoided a hyperlink to avoid detection.

as an 11yr veteran of posting in forums like this.... i highly recommend you consider the source of this post

Thanks for the heads up DLG. Post removed.

MarineVietVet, myFICO moderator.