need answers quick....huge problem with closing

[Anonymous]

When we started the mortgage process I had a job in one city, and planned on continuing to work for that company via internet/phone while looking for a job in the new city. The bank approved this with a letter stating that from my employer. While in the process I found a new job, and was told that would make the loan application look even better. So I started a new job, in the new city. The mortgage officer has a copy of the offer letter, and I told them I could probably get a copy of my time card, but that I wouldn't have my first paycheck until after our closing date. The contract has an expiration on it because it is a bank owned/forclosure house. We NEED to close. I was told the copy of my time card would be ok. I also told them that the office would be more than happy to fill out a Verification of Employment. Today, 2 days before closing, I am told that they need an actual paycheck. I don't have a paycheck yet, I've been there less than two weeks and won't recieve a paycheck until a week from friday, due to the way the pay schedule is set up. The underwriter person is saying I just shouldn't have started working there yet, and I could have used my paycheck from my last job. Or shouldn't have told them I took the new job. Or something. This is ridiculous! I'm in the same exact field, I just switched from one veterinary hospital to another. I've been in the field for over 10 years. I have proof of employment. I have an offer letter with my salary. I can get a copy of my time card even. Is it true that FHA will NOT close without a paycheck no matter what? There has been no gap in my employment at all, I worked till a friday at one job and started the other job the following monday. I still have a paycheck coming from the last job for one week's worth of work. I don't know what to do! And my son is supposed to start school on Monday and I have no where for him to live!

[Anonymous]

I think the underwriter is being unreasonable.  Unfortunately, any changes like that during escrow period in particular are looked down upon.  The first thing a LO should tell you is do not change anything about your file that does anything besides improve your credit score.  Job changes ,although great for you long term, show an underwiter instability.  What if you don't like the new job or the new place does not like you.  Most places, no matter what state you are in, can fire you with no reason for a time period and it often happens.  Your LO should have nixed this idea to you and I am not sure why he didn't.  As much as it sucks, it is perfectly normal in these lending environments to expect a paystub from whoever your listed employer on the loan application immediately before close.  The reasoning is that too many people were making up income with verification letters and docs that just did not exist.  Although not impossible, it is a little harder to fake a paystub.  Good luck and hopefully the lender and the selling bank can sort it out for you with with either a waiver for the paystub or a short extension unitl you recieve the paystub.   

[BrianB_The_Loan_Professor]

It is standard for them to ask for a paystub. Sorry hope it all works out.

B

[Lel]

I would recommend contacting the seller ASAP as ask for an extension of the contract. Unless they have another buyer waiting in the wings, it does them no good to void the contract. Ask for something reasonable, perhaps another week. Hopefully by then you'll have your paycheck in hand.

If you have a signed contract that states your income, that might help. An offer letter, unfortunately, carries little weight, because it doesn't indicate that you've actually taken the job. I had this problem when I first started looking for homes - I took a job with a considerably higher salary, but until I actually had a paycheck, my loan officer said that it wouldn't be worth my effort to try to get approved for a loan. Even though my employer (the Federal government) has as establish employment and income verification system precisely to avoid these problems, it was not good enough for the underwriter. And this was back when loans were relatively easy to get.

Another thing that you could try is talk to whomever is in charge of distributing the paychecks. Often, your salary is disbursed a week after pay period ends - for example, if you work from August 1-14, you get your paycheck on August 21. If you've worked a full pay period, maybe your employer would be able to cut you a paycheck a few days earlier.

[Anonymous]

The loan officer is the one that suggested I look for a new job!!!!! I wouldn't have done it otherwise. Also, had I known about the paystub requirement I would have started the job sooner, so I'd have a paystub. And I tried to see if I could get a check cut early, but the office manager is on vacation. I am going to see if there is anyway to lease the house for a week before closing, so we can move in, but as it is bank owned I doubt it. As I am still an employee of my other job, the loan officer is now trying to get that paycheck to count. Grr!

[Anonymous]

If you are still an employee of the other company and still ont he payroll you might be abel to work with that. 

Also, your LO should have known this would happen.  Obviously you have to follow through with them now as you are so close to closing.  That is just plain stupid from the LO's part.  You were already pre-approved apparently with the other job.  He should have told you to wait.  Oh well, no use crying over spilled milk.  Just goes to back to being carefull about LO's.  Some are great and some are very shady and or inexperienced.