Tax subordination FHA surprise issue? Don't know what to do!

[Reazon]

Hello,

I'm about to close June 30, I was given a closing disclosure with cash to close at $17k.

New build started in Feb.  Finished next week. 

I've done everything the underwriters have asked.  

We are doing FHA with 3.5%down because of my past tax issues. 

I do have 4 state tax liens for a total of $7k, which the state approved to subordinate the liens do I can go thru with the purchase. 

I've had to do alot of work to get here, alot of credit goes to this forum,  thank you. 

However after the underwriter said the subordination is good and we are ready to close, but, they called me yesterday saying the tax liens have to go against the LTV which requires me to pay an additional $4.5k at closing or pay off tax liens. 

Does this sound right? 

After I was given a closing disclosbuy,

Is the closing disclosure a set document? Or can it be changed right before closing?

I'm frustrated.  

Sorry I'm a first time buyer, single dad,  so getting that extra 5k by next week is almost impossible. 

I don't know what to do. 

Any suggestions or experience with this would help. 

Greatly appreciated. 

Thank you

[ShanetheMortgageMan]

Underwriter is mistaken, the tax liens don't go against the LTV calculation, only the FHA mortgage goes against the LTV calculation.  We've done numerous loans for people who have judgments, federal and/or state tax liens and it's never been an issue.  There are two requirements, the FHA loan cannot be more than 96.5% LTV (based on the lower of the purchase price or appraised value) (other than the $100 down payment program) and you must make a minimum contribution of at least 3.5% (the down payment).  There are additional guidelines when there is secondary financing, but a judgement or tax lien isn't considered secondary financing.  I believe that is where your underwriter is confusing things, they are trying to say the tax liens are secondary financing.  To get to the bottom of this, tell your LO to tell the underwriter to call HUD and ask.

[Reazon]

I appreciate your response. 

I spoke with my LO today,  he said they are inexperienced with this and will talk to the underwriters tomorrow. 

I'm hoping they see it that way so I can close this week. 

I'll keep an update. 

Thank you

[Fortunate2017]

I hope everything works out for your Reazon.

[Reazon]

Thank you fortunate2017.

The underwriters came back and said they were mistaken,  the tax liens will not go against the LTV, no extra deposit required! 

We are set to close this Thursday the 30th.

Thank you Shane for your input. 

[Gladius]

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@Reazon wrote:

Thank you fortunate2017.

The underwriters came back and said they were mistaken,  the tax liens will not go against the LTV, no extra deposit required! 

We are set to close this Thursday the 30th.

Thank you Shane for your input. 

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No telling what would've happened if they didn't catch that "mistake".  They probably would've told you they can't reimburse you that $4.5k and it has to be applied to your balance...smh

[Reazon]

WE CLOSED 6/30!!

LOCKED RATE @ 3.75%.

SO HAPPY,  I WOULDN'T BE HERE WITHOUT THE KNOWLEDGE THAT EVERYBODY SHARES HERE! 

GREATLY APPRECIATED! 

THANK YOU!!

[Adkins]

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@Reazon wrote:

WE CLOSED 6/30!!

LOCKED RATE @ 3.75%.

SO HAPPY,  I WOULDN'T BE HERE WITHOUT THE KNOWLEDGE THAT EVERYBODY SHARES HERE! 

GREATLY APPRECIATED! 

THANK YOU!!

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Congratulations!! 🎉

[IamWesty12]

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@Reazon wrote:

WE CLOSED 6/30!!

LOCKED RATE @ 3.75%.

SO HAPPY,  I WOULDN'T BE HERE WITHOUT THE KNOWLEDGE THAT EVERYBODY SHARES HERE! 

GREATLY APPRECIATED! 

THANK YOU!!

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@Reazon omg so happy for you and your family!!!  I too am a single parent, a Mom so I can just imagine how excited you were this day.  

How has being a home owner the past few months been????  Gosh, I am trying to hard to stay focused and wait for this crazy market to slow down and come back to reality!!  I am not giving up and reading your posts gives me hope!!!  Congrats again!