I was about to close on a home, but at the last second I didn't qualify anymore. Instead of using $2K of the buyer bonus money to pay down the purchase price, my lender structured the loan so that it goes towards paying points without my consent.

1. It is clearly not in my best interest to pay points. It would take me 4.5 years to recoup the $2K VS. instant $2K equity plus savings on that $2k for as long as I have a mortgage payment(assuming I roll equity into another home). Since this is an IO loan, it's highly doubtful I won't refi before the 4.5 years goes by.

2. I understand I won't be approved if I elect to have that money not pay points. The goal is to buy a home smartly, not at "Any cost".

The loan clearly isn't what I want. Do I have any rights as a buyer? It seems like a conflict of interest for her to structure a loan anyway she pleases in order to get me approved? She's hanging the earnest money over my head saying "we got you approved, so you won't get it back via financing contingency".

Please help ASAP. I'm not sure what to do.

Did the lender explain why?

The lender has nothing to do with you being refunded earnest money. Talk to your real estate agent about that and see what they say your rights are regarding getting your earnest money back.

The only reason I can think of is that they needed the buy down to make your debt to income ratio lower so you would qualify.

I would talk to a manager or supervisor of the mortgage company and ask for a more detailed explanation of why buying down your rate is required in obtaining a loan approval.

You are correct. The lender HAD to do it in order to bring the debt/income ratio below the threshold. I understand, but am against it. If I can't get into this home under MY terms, then I'll find another.

Another situation has transpired. I previously traded down my car to meet the ratios(at their request/advice). Of course the payoff of the original car and the new car payment hasn't hit credit bureaus yet. However, they expressly told me they have EVERYTHING they need to move forward(I provided all dealership paperwork). Now I get an email saying "it hasn't hit the CRA's" so we can't move forward.

I'm so tired of these people jerking me around, but they won't give me a letter stating I don't qualify for the loan so I can get my earnest money back. My agent says I need the letter or will have to take the seller to court.

I don't even know how I would prove I didn't qualify for a loan.

All you should have to do for the car is show them a paid in full letter from the previous bank.

Call a manager, supervisor, corporate office. Call your states attorney general and file a complaint. You cannot mandate that a borrower buy down an interest rate for loan approval then refuse a turn down letter based on you qualify with a buy down...

It is like saying you have 2000 in your bank account and we want it and since you do have it you qualify so we will not deny your loan.

Make a post regarding your issue on the earnest money in another topic for agents to answer regarding your rights.

In the meantime maybe you should seek an alternative lender since your current one is so uncooperative.

I'm pretty much abandoning my purchase at this point. I am going to REALLY blow my financing by running up my CC's with purchases I can return, to at least give me a shot at getting my earnest money back. It's my understanding that they order "supplemental" credit reports up to the day of signing in order to generate an approval before funding the loan.

Now I apparently owe the lender $450 for an appraisal. Something I never knew I had to pay for in the first place and would have never had done if they had correctly denied me the loan to begin with. What a mess.

Actually you owe the appraiser $450 not the lender. The apprasier did the work & must be paid.

I don't think your plan to run up your CC's is a very good one since it could take a mo or so to hit your CR anyway & is basically fraud on the merchants.

As for the return of your EM what does your purchase contract say?

The cost of the appraisal should have been included on the GFE you should have gotten when your loan app was reviewed.

This scenarior is getting common b/c borrowers are getting pre approved based on info that later proves to be erroneous or lender guidelines change in midstream so a loan the borrower may have qualified for 6 hrs ago is no longer available. The broker then will try to flip the file to another program in hopes of getting it to go.

If the lender ordered the appraisal, which they always do in most cases, then they are directly liable for the appraisal fee.

When a mortgage company chooses to not ask for payment up front then they take the risk on and are liable.

They cannot come after you legally for the cost of the appraisal unless you signed something in writing saying you were going to pay it.

What did the real estate agent say and what did the managers say when you talked to them?????

The mortgage company orders the appraisal so they can be held liable to the appraiser. If the buyer signed the GFE showing the buyer will pay the appraisal fee out of closing, then the buyer can be held liable to the mortgage company. If the mortgage company has to take the buyer to court to recover, then the buyer can also be held liable for court costs and lawyer fees. I've seen it happen.

Techinically sure the appraiser *can* pursue the lender but it's a really stupid move akin to biting the hand that feeds you esp now that appraisers are mostly found working in convenience stores & desparate for work.