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suguleasa · Joined: 07 Jan 2010 Posts: 9 3.12 Dollars($)

Hi All,

I saw a mortgage broker yesterday and she told me that pre-approval letters cannot be given anymore by lenders. But she told me, that the legislation is not yet in place and she is not 100% sure about it.

Is that true? I live in Champaign County, IL.

Thanks!

smithsussane · Posted: Thu Jan 07, 2010 9:33 pm Post subject:

Hi suguleasa!

Welcome to forums!

I haven't heard of any such news which states that the lenders have stopped giving pre-approval letter. I would rather suggest you to speak to some other local lenders and see what they have to say in this regard. You can apply for a pre-approval from any of those lenders in order to get a loan.

Feel free to ask if you've further queries.

Sussane

suguleasa · Joined: 07 Jan 2010 Posts: 9 3.12 Dollars($)

Thank you for the quick reply!

Could this be at a local level?

Posted: Fri Jan 08, 2010 8:10 am Post subject:

I suspect what you’re hearing is tied to HUD’s brave new world of the revised GFE. Preapprovals may or may not have all 6 trigger points for issuance of a GFE but critical point is that HUD is pushing the “don’t ask; don’t tell” policy. With preapprovals LOs can NOT require copies of pay stubs, W2s, bank statements – you know, the neat stuff to determine is the prospective buyer is actually working or has money. The LO must work with what the homebuyer says to issue a preapproval letter. The “says” is typically verbal (a 1003 might raise the GFE issue) and I can just hear the “I didn’t say that” if things go south. So, yes, a LO can issue a preapproval letter with multiple caveats but it’s virtually worthless since it’s based on hearsay.

gmakerley · Posted: Fri Jan 08, 2010 10:19 am Post subject:

as our guest so pointedly indicated, "a preapproval letter with multiple caveats...it's virtually worthless since it's based on hearsay."

that is entirely correct.

but "don't ask; don't tell" policy? hmmm...methinks this got off track a wee bit.

Posted: Fri Jan 08, 2010 5:19 pm Post subject:

My point is that HUD is stipulating we cannot require pay stubs, W2s, etc. in order to issue a preapproval letter -- just base the calculations on what the prospective buyers tells you. That's my "don't ask; don't tell" slant.

gmakerley · Posted: Sun Jan 10, 2010 9:13 pm Post subject:

i'm just accustomed to seeing that in a different context, i guess.

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