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#405859 - 04/30/12 01:08 AM Loan denied 45 days in, 2 business days before closing?
Chris G. Offline
Member

Registered: 08/02/10
Posts: 15
Loc: Highlands Ranch CO
Loan denied 45 days in, 2 business days before closing?

Client is is purchasing a home we have had under contract since 3/15. Waiting for approval and hearing "we will know tomorrow" "You are in final underwriting" we got denied at 445pm Friday with no answers other than "Employment issues, CO-Borrower" He did take unemployment in late 2010 into mid 2011 but has since regained employment with a year contract and an option to renew in 2013. It was known from the initial meeting with the lender and deemed a non-issue day one.

We pushed the issue with the lender, the processor was out sick Friday and someone else worked on the file.

Is there a way to appeal? We are waiting for an official explanation, but what can we do?

We have had inspections, paid for the appraisal, and my client isn't very happy. Any advice would be great!

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#405880 - 04/30/12 11:30 AM Re: Loan denied 45 days in, 2 business days before closing? [Re: Chris G.]
Bigtoe Offline
Major Contributor

Registered: 10/14/07
Posts: 2208
Loc: Outer Banks
When an underwrite kills a loan it is usually right before closing. What the lender thinks does not matter when it comes to the underwriter.

You can try to submit the loan package to another lender. The best bet would be to find a lender with an in house underwriter who can look at the loan package upfront.
_________________________
Your Outer Banks real estate agent. Helping people buy and sell OBX real estate since 1989.

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#405884 - 04/30/12 12:45 PM Re: Loan denied 45 days in, 2 business days before closing? [Re: Chris G.]
Vermont Offline
Major Contributor

Registered: 04/12/08
Posts: 7591
Loc: Vermont's North-East Kingdom
It may be that something changed very recently when the underwriters were doing the final credit check and employment verification; just before Closing.

Sometimes people pre-maturely start going into debt with their credit cards in anticipation of owning the new house . . . . if they should just hold off one or two more weeks.

Another common development is Unpaid Medical Bills which Hospitals won't report as overdue until they turn them over to a Collection Agency. People claim that they're surprised that their Credit Score could change overnight . . . . but upon examination, there's usually a good explanation . . . . and they knew about the cause all along.

Final credit and employment checks killed a deal of mine 48 hours before Closing because some Delinquent Alimony and Child Support SUDDENLY showed up on the Buyer Husband's Credit Report.

His Ex-Wife's Divorce Attorney had been negligent in reporting those matters to the Credit Bureau; but once the Ex-Wife found out hubby was buying a house with his new squeeze, that information put the ky-bosh on the deal.

This is the one where his new Wife didn't even know he had been married before . . . . so he has other problems besides the Mortgage falling through.

So your Buyers may have appeared squeaky clean when their initial qualification for the Mortgage was performed . . . . but things can change. It's probably due to something that they knew was there lurking in the background; but hoped no one would discover. Some things are never discovered. And some people need to be warned to NOT do anything which could tamper with their credit scores until AFTER the Closing.
_________________________
Dale C. Hittle of GOLDEN RULE PROPERTIES in Glover, Vermont
Where We're Always Striving To Put Together "THE FAIR DEAL"

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#406104 - 05/03/12 12:02 PM Re: Loan denied 45 days in, 2 business days before closing? [Re: Vermont]
Chris G. Offline
Member

Registered: 08/02/10
Posts: 15
Loc: Highlands Ranch CO
Update:
It was overturned on Monday. It was the co-borrowers employment contract that was an issue. They did the math wrong, an error on their part that they did admit to. Sadly, the listing broker wouldn't extend contract and once he caught wind that it had been denied, relisted. He had another verbal contact, more money, higher down, clearly a more reputable lender and the seller let our contract lapse on the 1st. Our lender knew the time crunch and still couldn't get any commitment. 48 days. We have resubmitted with another lender with an in house underwriter and has given us a thumbs up.

What did I learn? The loans that some banks offer, while look good on paper, aren't any good if you can't get them done!

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#440812 - 11/14/14 09:07 PM Re: Loan denied 45 days in, 2 business days before closing? [Re: Chris G.]
NMRoz Offline
Junior Member

Registered: 11/14/14
Posts: 1
Loc: Dallas, TX
I am an avid gamer -- as in I like to play PC games -- and at one point in time I was seriously considering buying a house to use for my professional gaming business. I am younger so I don't have a lot of established credit and I have federal student loans. I knew I was going to be hard pressed to be approved for a loan if I just went to the bank so I researched online and found a lot of creative ways to get working capital to do what I needed financially. One company that was really interesting to talk to was Shelfrich. They offered up a lot of ideas and also gave me some insight into whether what I was looking to do was going to make it in the long run. If you have credit issues or need funding I would visit their website: http://shelfrich.com

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