Is the Mortgage Underwriting process horrible for everyone now? (approved, credit rating, financial)

[misterno]

Originally Posted by Hi from Underwriting He||

Unbelievably frustrating! I've been at this 4 weeks with Wells Fargo. The group I ended up with over in Winter Park - mortgage consultant, consultant assistant, loan processor and underwriter are definitely not on top of their game. Particularly the loan processor who can't add 2+2, can't keep track of things and insists that items were never sent. Today I sent the 60th document - some as many as 50 pages long. Statements, copies of checks, pay stubs, tax returns, insurance documents, leases, HOA agreements, letters of explanation, HUD statements, disclosures, etc. and the list goes on and on and on. Day after tomorrow is the last day to close and they are not going to make it. I will end up loosing my $2K deposit because the "no financing" loophole on the contract was only good for 17 days and the bank issued a commitment letter. I must close by the date in the contract or loose the deposit. As the loan is not "clear to close" I am SOL.
So my advice
- put the down payment in a savings account and don't touch it for 3 months.
- Put your paycheck in your checking account, pay all your bills on your visa and pay the visa once a month from the checking account.
- Don't buy anything for 6 months... no credit inquiries, don't even change your cable service or it will show up.
- Don't go to Wells Fargo, under any circumstances - it's underwriting hell.

This is beautiful

I wish there are other recommendations like this before I apply to mortgage...

So I am waiting for you guys to step in and tell us what to do before we apply for a mortgage

[thelopez2]

Originally Posted by misterno

This is beautiful

I wish there are other recommendations like this before I apply to mortgage...

So I am waiting for you guys to step in and tell us what to do before we apply for a mortgage

The last guy, Underwriting Hell, just did. Also I will only go so far in making someone else's job easier.

[Dizzer]

We too have been in underwriting hell. Only my partner can go on the loan because I am self employed. She has decent credit, good down payment and no debt. She wasinitially denied. My dad is now going to be a co-borrower. Makes $400k plus per year, no debts and lots of assets and LO is still saying it will be tough to get this done! I just don't get it! Can't wait for this to be over. Keeping my fingers crossed it all works out.

[thelopez2]

Originally Posted by Dizzer

We too have been in underwriting hell. Only my partner can go on the loan because I am self employed. She has decent credit, good down payment and no debt. She wasinitially denied. My dad is now going to be a co-borrower. Makes $400k plus per year, no debts and lots of assets and LO is still saying it will be tough to get this done! I just don't get it! Can't wait for this to be over. Keeping my fingers crossed it all works out.

Why don't you go on the loan with your father. Loans aren't denied because you are self employed. Many are denied because the self employed people try to reduce their taxable income writing off everything then show little income. What is your net after expenses?

If it was your partner and your dad, I see them considering it an investment property with 25% down.

[Nepalpeak]

Originally Posted by BacktoCO

This is so true. We are currently using a broker who I am sure is just prepping our file to be perfect for whatever the corporation is they sell the loan to. When we refinanced our current house awhile back we used a smaller, in town bank and the service and level of professionalism was much better. They never sell their loans. I think that makes a big difference in how you are treated and what you are required to go through.

Good news for us! The underwriters now have everything they need with 2 weeks to spare. I guess I should consider myself lucky. Pheeww! I'm still not going to feel completely okay until after the closing.

I currently work for a smaller bank and we rarely lend our own money. When we do, it's much easier of a process but guess what.... You pay a higher interest rate. Fannie Mae, Freddie Mac and Ginnie Mae don't service loans ( meaning you don't pay them monthly payments) but they almost always are the investors that small community banks and big banks that mortgage brokers aim to "sell" to. Example ( I know from working for a similar large bank/lender) Wells Fargo ( big bank) worked with you on your home loan and closed it for you. Then they sold it to Fannie Mae for the best return and then you pay Wells Fargo every month and never hear or contact Fannie Mae becAuse Wells is also servicing it. Broker shop: sells to big lender like Wells Fargo and the same thing happens. IF your the rare borrower who goes into MomandPops bank and they pull the money bag out of their vault to lend to you for the house ( being sarcastic there) then they won't sell to the government because they don't want the government regulating their loan process, because they want to close fast with a higher interest rate than the government loans may allow....

[Carrscandles]

How high of an interest rate are we talking? We just started the process with a new lender because our situation makes it difficult for any other lender, if not impossible. Income and credit are good, but new job causes issues. The new lender is going to do an in-house loan for us, but we just started the process so no rates have been quoted to us yet, so I'm just curious... Thanks!

[fantom065]

Were you working with Roundpoint Mortgage?

[MeetMarkWilson]

I'm a lender. I've read the complaints here. I'd like to explain a few things. A lot of loose borrowing and lending was done prior to the housing crash of 2007. Blame who you like but the 'fast and loose' practices were on both sides of the fence and ALL of it contributed to the foreclosures and home devaluation we see today--as well as the practices complained about here. the knowledge was on the lender side and the "we'll do whatever we have to" happened on the borrower side of the fence. I personally witnessed my (now) ex-wife forge a document which "proved" she was receiving 5000 monthly from hr mother for secretarial work when the mother wasn't earning 20k per year, if that. Then comes the fact that my ex didn't do anything but sing at a coupla weddings to earn her alleged 60k per year. The lender, knowing it wasn't proof, liked the risk/benefit ratio and accepted the "proof" which came in the form a signed letter. No bank statement proved any related deposits or payments but that isn't the point here.

The point is this; thousands of homeowners who later went underwater when the market got hot due the demand for homes that was fueled by easy underwriting and no doc loans then went to DC and testified to the effect of those underwriting guidelines and identified a long list of practices that have now been corrected owing to that testimony. Go to government for your answers and help and THIS is what you get. Combine that with the PATRIOT ACT and now you might see why every dime has to be accounted for as to where it came from, its regularity, its use, etc. because the PATRIOT ACT begins with a presumption that if you are involved in large transaction such as a home purchase or refinance, you ARE laundering money until you prove you are NOT.

EXAMPLE: I had a borrower who sold a loom on eBay to a buyer in Italy. The buyer paid using PayPal. The seller took her PayPal debit card to a generic ATM machine and withdrew some but not all of the cash from the PayPal account. She then spent some of it and then deposited the rest (660) into her checking account a few days later. Her refinance did not go through because despite that we proved she was the selller, that the loom sold for what converted to 1101.64 USD, that the money went into a PayPal account xxxxxxxx, that a cash withdrawal was subsequently taken from PayPal account xxxxxxxxx and that it was less than 1101.64 but very close to that amount, that she spent approximately 421 of the cash that same day as well as what time that same day she spent it after the withdrawal and that a day later she took the remaining cash (less $21.xx for purse money) and deposited the 660 in her own checking account, we could not prove that the 660 indeed came ONLY from the sale of the loom. She got no refinance until 60 days later.

Why you ask?.... because your neighbors and you asked for this safety. Not in so many words but you voted for the people who wrote these laws and enacted the PATRIOT ACT to ensure that terrorist weren't laundering money for dubious activity on American soil by buying and selling homes. Why is the patriot Act having this effect? Because the federal government backs these loans you want and they are not about to be fingered for supporting terrorism. Their solution? You prove you're not a terrorist. There's your protection. Lenders had it good and borrower's did too until they all got greedy and stopped thinking about the impact of a hundred little choices we all make everyday to make it better for our kids. They wanted the house and the money and did whatever it took to get it and now THIS is what THAT resulted in because the issues were solved by government from **outside** your home (or apartment if you've find you cannot get a loan) rather than from each of our individual moral integrities. Everyone appreciated honesty but when the rubber hits the road, only a small few can handle the truth. Ironic isn't it? This should be a lesson in the value of having integrity first and money later. Do you care about your kids or grandkids or your neighbor's kid? Wanna fix this mess.... take the first step... deal with a lender of integrity and act like the world you control is yours to control by making excellent decisions each and every time. Realize that good lenders aren't evil just because they re folling the rule you asked for and not all borrowers are bad just because they didn't know someone was making a cluster of bad rules which should only apply to people when aren't worth the electronic funds that back their new homes. Your reality has been reshaped because of inaction and ignorance. Your reality has been altered because you were probably too young to even form the thought that the news that was airing in 2008 was going to make a loan tougher for you today. ALL lenders are subject to these new laws... the 20,000 pages of the Dodd-Frank are still rolling in... in waves. Tthe CFPB is the new SOULESS pitbull of the Federal Reserve Board and threatens the livelihoods of bad lenders and good lenders alike by levying death knell fines to lenders who even look like they were even thinking of doing something untoward. Who suffers the most... you guessed it... you! Those trying to good to their communities by doing good loans for good people are acting under duress to keep their jobs. I can't even speak to an appraiser these days without risking my job and thus, my children's futures. If borrowers want this stuff unwound, they're going to have to buckle up and realize they let these rules happen, lenders don't have the choice now and neither does a borrower. Your options have been limited because EVERYONE was misbehaving in the early 2000s.

[Australian Shepherd]

Talk about venting.

[JGC97]

Your options have been limited because EVERYONE was misbehaving in the early 2000s.

Not everyone, pal. I never bought a house where I didn't put less than 20% down. I always paid my bills on time. Never defaulted on anything, never sued or had collection companies calling me. There are a lot of people like me out there who find the current hoops people are having to jump through today just plain disgusting. Especially since big bankers were given bonuses even when they granted loans to people who didn't give them verified income and substantial down payments. Letting people buy a home they would never be able to afford without a variable rate loan and then being squeezed out of the home when the rates began to adjust at a higher level is just plain ludicrous. Lenders and realtors kept their commissions but what do you care anyway? You got yours. To hell with everyone else. Right?

You want to call all buyers a bunch of whiners but the truth is, lenders and realtors were the cause of the fiasco. They should never have pushed buyers into trying to buy something they couldn't afford in the first place. I hope everyone learned a lesson from it.