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FHA pre-approval-then denied

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New Member

FHA pre-approval-then denied

Hello to everyone reading this.  I recently went through a very disappointing time while getting approved for a home loan.  I would appreciate any suggestions, advise, or just input.
 
This is what happened.....
 
At the beginning of May a neighbor of mine referred me to a realtor that they worked with.  I called him and he got me in contact with a guy he works with regularly to see if I could get pre-qualified before I looked for a house.  Let me say that I had a good handful of collections on my credit.  But, he pre-approved me with the contingency that I pay off a judement; by which I did. He pre-qual would also expire after30 days (May 27). I found a house, signed a contract, got a home inspection.  Needless to say, it pretty  much failed.  The inspection cost me $259. There was a lot of things that the inspector found that turned not only myself away, but my realtor as well.  My realtor told me he had a great house he wanted me to look at.  It was just what I was looking for so I placed a bid and signed another contract June 2nd. The seller accepted my offer. So I figured I was on the road to accomplishing purchasing my first home.  I figured, so what...I have to get another pre-qual.  Nothing changed on my credit report in a month.  I got an inspection on house #2...was working with the seller to fix a couple things.  Because I used the same inspector, he cut me a deal and charged me $209. I then paid the earnest fee of $200 to my realtor.  Then the bomb was dropped......
 
My loan man called me one day to tell me that the FHA guidelines/rules changed and that he found something on my credit report that popped up within the last 12 months and that I had to get it paid to qualify again.  Mind you, this item he was referring to was on my credit report the whole time and said he "must have missed it".  He told me I needed to get it paid and also provide him with documentation of 3 bills I have paid for 12 months that were not late more than 30 days.  I asked him several times to verify that if I paid this collection, that we would be good to go.  He assured me to have faith and he would make it happen.  So I paid off the item off my credit report $340 and provided him with the documents.  Two days after I paid the collection, and provided him with the documents he requested, he informed me I was denied.  Talk about falling into total depression.  I'm a single Mom who works full time.  I had already used my tax rebate check to pay off the judgement.  So I'm looking at just under $2000 I paid in cleaning up my credit and fees. 
 
So...here I am...still in a contract with house #2.  Trying to get financed.  I've talked to 3 different companies and they are in shock that I even got approved to begin with due to me having collections on my credit.  My realtor put me in contact with another loan officer, and I just today provided her with all the documents she requested to take to the underwriter because I was not automatically approved.
 
That is my sad...long...story.....Not only am I discouraged, but depressed, and broke.
Any thoughts, suggestions, or advise?
Message 1 of 23
22 REPLIES 22
Member

Re: FHA pre-approval-then denied

I have no advice, just that I'm hoping you get your dream house for you and your family. It is still an American dream.
Message 2 of 23
Frequent Contributor

Re: FHA pre-approval-then denied

I am so sorry to hear that you had to go through all of that. Were the collection accounts that you spoke about unpaid collections and how recent were they? Also what was your Fico score at the time?
Message 3 of 23
Established Member

Re: FHA pre-approval-then denied

I'm wondering too why you would get an approval then denial....beats me....I would feel the same way you do...hang in there and good luck!!
Message 4 of 23
Super Contributor

Re: FHA pre-approval-then denied

most pre-approvals are done at the loan officer's desk..... so the approvals are only as good as the loan officer issuing them.
i am sorry to say that fha guidelines didnt change... loan officer just screwed up.
 
what is this new loan officer saying?
Retired Lender
Message 5 of 23
New Member

Re: FHA pre-approval-then denied

The collections are staggered anywhere from 2003-2007.  The 2007 collection is the one I just paid off. 
 
The new loan officer is saying that I am not automatically pre-approved.  She said for me to provide her with a list of documents for her to take to the underwriter to see what he/she says.  If he/she can not approve me, they will tell me what I need to do in order to get approved.
 
I'm clueless as to why it is that I could get pre-approved and then denied.  I'm upset at the fact that IF this guy DID screw up, it cost me money for home inspections I should not have even had to pay due to not being approved.  I'm considering looking into filing a civil suit against him or at least report him.
Message 6 of 23
Super Contributor

Re: FHA pre-approval-then denied

rae, when i started out in this business my boss told me to 'say yes' and get the deal in the door..... so we could figure out how to get it done.
lucky for me, my trainer was 800 yrs old and had been doing mortgages longer than that. he said: "pull that crud and i will....... well, i cant repeat the rest"
 
there are still bad loan officers out there.
and even good ones will make a mistake.... but if you arent approved thru automated underwriting with solid documents, the loan officer needs to be more cautious.
 
i am sorry that this happened to you.
 
Retired Lender
Message 7 of 23
Frequent Contributor

Re: FHA pre-approval-then denied

Dallas,
 
Why is it that you may get pre-approved for a loan, then pay these inspection cost, appraisals, etc.. then have to wait again to see if you are approved? Why don't lenders give you the final approval in the beginning so you don't waste money. I can understand them pulling your credit report to see if anything has changed but if everything is the same why do some people get denied?
Message 8 of 23
Super Contributor

Re: FHA pre-approval-then denied



shalane85 wrote:
Dallas,
 
Why is it that you may get pre-approved for a loan, then pay these inspection cost, appraisals, etc.. then have to wait again to see if you are approved? Why don't lenders give you the final approval in the beginning so you don't waste money. I can understand them pulling your credit report to see if anything has changed but if everything is the same why do some people get denied?



very good question.
with all of the fha loans in the system..... most lenders will not send a pkg to underwriting without a property.
my company will take a "contract only" and underwrite. that way, you dont have to pay inspection/appraisal until after the underwriter see the file. then you get title work and appraisal done and clear those conditions.
you may want to have an extended option period and certainly a financing contingency on the contract so your earnest money isnt at risk.
 
like i said.... most pre-approvals are one at the loan officer's desk.
when i pre-approve someone, they close. some loan officers simply do not go the extra mile to look over all of the important pieces.
i recently got a very rude phone call from a realtor about my 'lack of ability in delivering a pre-approval letter in a timely fashion'
thy assumed that since i was late with the letter.... that i would be late with the final approval.
my answer: the letter doesnt go out until i am certain..... and that MY CLIENT expects me to be thorough.
i got an apology beore we hung up.
 
 
 
Retired Lender
Message 9 of 23
Frequent Contributor

Re: FHA pre-approval-then denied

Okay so lets say that I get pre-approved can I request to the LO that they send my file to the underwriter before I pay inspection costs and other fees?
Message 10 of 23