I had received an e-mail from a consumer yesterday, who has been reading a few of my blogs. She told me that they were suppose to have gone to settlement on the purchase of a new home on March 11th. They went with the realtors suggestion of using their lender. This happens to be a national real estate company. To their surprise, they were told the night of the 10th that they were denied for the loan. They had been in process for a month and the lender blamed it on the issue that she owns a house with her sister. She is moving out and buying a home with her fiancée. Every time that she spoke to this lender, everything was fine.
After finding this news out, the buyer panicked because they really wanted the house. She had spoken to a few other lenders in the last few days that all said that they couldn't help. The reasons these lenders gave her was because her boyfriend had defaulted on a student loan a few years ago. This client has applied for a FHA mortgage, which is a government backed loan. But it doesn't mean that you can't get a mortgage if you had defaulted on a student loan. But this was a few of the lenders resons to why they couldn't help them purchase this home. Anyone can give these answers, unless they investigated behind what the client gives them as an answer. Please read more to find out what I am talking about.
Knowledge, as many of us know, can be dangerous. Sometimes this knowledge is learned over time and through experience. After 15 1/2 years in the mortgage industry, I still keep learning. But one thing that I know is if I don't know the answer, I ask someone that could help.
In the case of this client, who had a defaulted school loan, there are 2 things to know and check on. You first run their name and social security number through the FHA connection and get a CAIVRS authorization number. As long as it comes with the authorization number, this means that they can get a FHA mortgage, as long as they qualify in regards to the other FHA guidelines. The other is to see if they are either paying back the defaulted school loan or have paid it off. If they have made more than 6 monthly payments or paid it off, they can still get a FHA mortgage then. I just have to assume that the other lenders didn't check the CAIVRS system and/or didn't ask about the monthly payments. Because they either didn't know or ask, I am now able to help another client out.
Overall, buying a home FHA or Conventionally, it should all be fun. I have said this many of times. If you are dealing with a lender that at first was very responsive to you prior to your mortgage application, but after you applied, they take forever to get back to you now, this might be a red flag. For those red flags, please read this : Consumers need to be aware of these Red Flags !!!!! And the lesson here, just because a lender says no, doesn't always mean that it can't be done. Even when it seems difficult, there are sometimes a solution. Especially with a loan officer that thinks outside the box.
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For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
Copyright © 2008 by Jeff Belonger
Jeff,
Another good post!!! Get the word out...we're not all alike!!! Thanks, Fran
Jeff,
I'm shocked, a lender monkeying around! Now we know how Cheata got his name, cheating.
Don't you love it when old facts don't show up until the ink on the credit report has dried 30 to 60 days.
Bill
Although I'm a lender, I'd love to see you post on the opposite...."Lenders...all realtors aren't the same." I love my 2 realtors, but the rest of them are parallel to many of your examples.
FRAN..... thanks for the compliment and for stopping by.
RANDY..... both lenders were trying to do the loan as a FHA mortgage. The first issue was just thinking outside the box. The 2nd is a FHA guideline. And as I mentioned, your first thought as a lender should be to run the clients social security numbers through the CAIVRS system. If it comes back okay, it means that if they qualify, they can get a FHA loan. Then asking them how long that they have been making payments... I know you have had many problems with lenders who do VA loans... if you haven't done many, it won't go smooth, because they are somewhat different than conventional and FHA mortgages.
BILL....... hey, I monkey around often.... lol But not with clients loans... it's funny, yet sad. The first scenario should have been addressed from day 1. The mortgage shows up on her credit report. This just had to come down to the loan officer not knowing certain guidelines.... hey, I just picked up another deal because someone else dropped the ball. I don't mind.. ;o)
MARLENE...... thanks... I was happy, because I'll be closing this loan by next Friday.... not only do I have another happy client, but some extra money. And hopefully a client for life.
LARRY..... lol... well, I think I will leave that one to a realtor. I don't care for many that I come across, just as I don't for loan officers. I am very harsh on some of the basics and when I see that this person either hid the truth, misled, or just didn't bother to find out an answer.... that gets under my skin....
LANRE....... thank you very much for the kind words and thoughts. Just a FYI... I don't have to be in your local area to help any of your clients. I am licensed in Maryland and soon in Virginia... in a month. Thanks for the compliments..
DAVE..... that's good to know, that we are on the same side. ;o) And hope you enjoy my future blogs...
Jeff,
Thank you for so eloquently stating the obvious. The key is that you go the extra mile and give us the info we need. FHA is a great tool, we need all the great tools we can get. What we need more than anything is true professionals, like yourself. Take care...
Jeff
Excellent points that so many need to be made aware of...I wrote a similar post a couple of days ago that concentrated on the declining market position that so many lenders are misinterpreting.
Every realtor conversation I have had in the past few months has had a discussion of FHA. Since most Realtors got into the biz in the last 5 years, it makes sense that many of them are newbies to FHA and the process of doing an FHA purchase.
Jeff, maybe for a post you could present the DPA program in terms of, "How to educate your seller and listing agent" about participating in DPA!
Hi Jeff,
You make a great point about the change in the lender's tone. Many years before I got in the loan business, my husband and I needed a second mortgage. I would call the lender and he kept telling me it was "on the underwriter's desk". It took me a while to figure out that this man was completely incapable of telling me he could not do the loan. Since I didn't have a purchase deadline, it dragged on for over a month, until I finally figured out that this guy would string me along forever because he "couldn't say no".
Your post is really more about mortgage brokers not knowing what they're doing, but that red flag part hit home.
As a lender, I always try to make sure my loans will be approved before I submit them, but if something comes up, I figure how how to solve it and then contact my borrower pronto.
Thanks for the great post.
Nice post Jeff.
The bulk of my current pipeline this month is from deals that other lenders could do but in the end could not for various reasons. Sometimes I feel like a Mortgage Swat & Rescue team.