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Underwriting Forever!

Posted on: 26th May, 2010 09:56 am
My wife and I are first time home buyers. We have an accepted offer on a $286,000 home. We both have steady jobs. our credit scores are not the greatest in the mid to high 600's. We have the money for a 20% down payment as well as some additional savings on hand.

We started this whole process over a month ago and at first my loan officer at wells fargo told me this was a slam dunk. The loan application has been with the underwriter for over two weeks now. The underwriter keeps requesting more information from me which I have provided numerous times. Every time I get her more information, I'm told this will be the last time which it obviously hasn't been since this is the 5th or 6th time I've done this. I've been told that what's holding it back is some NSF charges in our checking account. Although there's really never a good excuse for NSF charges, these have reasonable ones.

Now the underwriter wants my bank statements from last year which is most definitely going to kill our chances to get approved. We had a lot of NSF charges in 09' but we've been making a huge effort to manage our account better. We have a fraction of the charges we did at this time last year.

We are supposed to close tomorrow which won't happen. It has been such a roller coaster of emotions going from a slam dunk to pretty much no chance. Any help or suggestions would be greatly appreciated.
Welcome nbratski,

As the underwriter wants to check your bank statements, you will have to provide them with it. The lender will go through it and let you know whether or not you will be able to close the mortgage. As you have taken steps to pay the off the NSF charges, it will be a positive point which you will have to tell the underwriter. May be he will consider your situation.
Posted on: 27th May, 2010 12:57 am
There would certainly seem to be more here than meets the eye. It's unusual for an underwriter to go so far back in history when it comes to overdrafts.

It may be that your description of the events leading up to your NSF activities isn't holding water. Is it possible that you have been inconsistent with your answers to those questions? Certainly, overdrafts are a bad habit, and can influence someone's thinking when they're trying to approve your loan, but this can't be the only thing giving you such it?

All that said, I truly hope that your closing goes off as you have planned it.
Posted on: 27th May, 2010 08:29 am
It's the day after I was supposed to close and I have yet to hear back from anyone at well fargo. Anyways, this is how the overdrafts went down.

For the initial information I was told to gather, on my previous 2 bank statements there were 3 overdraft charges which I wrote a letter of explanation for. This is where the story gets tricky. I have a trust set up in my name which I planned on using as assets. Also, the trust states that when I reach a certain age (which was my last birthday on May 5th) I will recieve a third of the total value of the trust. This all went to the underwriter the last week in april so it was before I recieved the distribution. I should also note that I recieve a monthly distribution from the trust which comes from stock dividens (not the principle).

So from my understanding, the underwriter can't use the total amount of the trust as assests on top of the monthly distributions I was recieving. So she asked for a statement from my checking account after I recieved the third of the trust and that will be used as assets and the monthly distributions will be used as income. I was supposed to recieve the distribution on the 5th but there were issues selling a mutual fund so it came late. Not knowing of these issues I wrote 2 checks for upcoming bills. Those checks posted in my account in the 12 at midnight and the distribution posted in my account 9 hours later when my bank opened. Of course those 2 checks overdrew my account.

I wrote a letter explaining the troubles selling the mutual fund and I also had the trust company wirte a letter explaining it was on their end. I guess it was not good enough for the underwriter and now she wants my entire history from 2009. My wife and I were not as responsible with our account in early 2009 but we have since taken great effort to do so. I haven't sent that history in yet because the person who is gets the file ready for the underwriter suggested we wait. I know if I send it in it's going to be the end of it. I just wish that the bank wouldn't have dragged their feet until past the closing date.
Posted on: 28th May, 2010 05:01 am
I don't get what "the person who is (sic) gets the file ready for the underwriter" is trying to tell you.

Waiting certainly didn't get you a closing on the proposed closing date. And here we are on Friday and this is a long holiday weekend.

There's a trick to what underwriters do. When they ask for something, that means that they want it. If you don't provide it, they cannot move forward and do whatever it is they wanted to do.

In other words, not sending the requested documentation did you no good whatsoever. What you need to do is to add a reasonable explanation to the statements requested, thereby softening what will undoubtedly look like poor handling of the account to the underwriter.

That "person" apparently has no clue about how to process a loan. Too bad.
Posted on: 28th May, 2010 01:47 pm
I was promised again today that I would get an answer and I found out the underwriter hasn't looked at it yet with an hour left in the work day. This is starting to seem very unprofessional.
Posted on: 28th May, 2010 02:10 pm
But did you provide what was requested? You didn't indicate that in your previous post.

Promises made on behalf of an underwriter are usually worth their weight in cotton. If you have a promise from the underwriter directly, then nothing should cause it not to happen. And when they say "today" - you can never count on it being 9 am; today lasts as long as they are still working.
Posted on: 28th May, 2010 02:16 pm
so i finaly found out that the loan was denied. to be honest it was more of a relief than a disapointment. i was tired of playing the waiting game with them. anyways, the loan officer at wells is a somewhat of a friend of the family and he has offered to give my file to a friend of his who is a broker. again, he told me "i see no reason why this file can't get approved". so i've decided to move forward with this after the holiday weekend. any suggestions?

a concern of mine is when the loan officer gives my file to the broker, too much information could be given. information that may have hurt me with wells fargo and may not be needed by the broker. he reassured me that it won't happen but am i taking a risk?

i also want to know some opinions if it's even worth it for me to pursue other means of financing. we wan't this house more than anything in the world. like i said before, we both have steady jobs, we have enough for 20% down and our credit is in the mid to high 600's. the loan officer said with wells it all comes down to "one persons" opinion meaning the underwriter. he said with a broker, they have multiple avenues to go through. he also told me that this brokerage has what he called an "in house money portfolio" or something along those lines which he said if i can't get a loan approved they can finance the loan at a higher rate and i can later refinance the home. does that make sense?

finaly, i was able to move the closing date back to june 25th. the sellers are not putting the house back on the market. i'm also concerned about closing by the end of june so we can get the $8k tax credit. shouldn't they be able to close within 30 days or so?

thank you to everyone who has responded to this post. it has been a great help for me.
Posted on: 29th May, 2010 04:52 am
Hi nbratski,

I don't think there should be any issues regarding the information that you give to the broker. It will help the lender to know your situation and it will help you in getting your file approved. If you can now afford to pay the higher rate of interest, then you can go for it and then later on refinance the loan for better terms and conditions. You can request your lender to close the loan within June 25th so that you are able to take advantage of the first time homebuyer's tax credit.


Posted on: 01st Jun, 2010 03:31 am
So I went to a broker and he has my loan in to a lender. He "doesn't see any problems" and is confident I'll get the loan. After the first time around, I'm not so confident. I hope this works out for us.
Posted on: 06th Jun, 2010 08:49 am
I heard back from the new underwriter on Friday. They only need a few misc. pieces of information. One of them was my bank account statements or VOD (verification of deposit). The broker wants to send the VOD because it doesn't show the overdraft charges that hurt mewith the first bank. Does anyone think this will fly? I'm again getting very close to my new closing date. I'm hoping this goes well.
Posted on: 13th Jun, 2010 08:14 am
I don't think it will matter much if your broker sends the verification of deposit (VOD).
Posted on: 14th Jun, 2010 01:46 am
I'm more or less concerned on the chances of the VOD being enough information for the underwirter. Does anyone know if a VOD is good enough information for an underwriter? If she comes back asking for my bank statements I'll be in the same place I was before the first time around.
Posted on: 14th Jun, 2010 05:17 am
That last post was from me. I forgot to log in...
Posted on: 14th Jun, 2010 05:18 am
I feel that the verification of deposit will be enough information for the underwriter. Moreover, your lender is asking you to do so. I don't think the lender will misguide you.
Posted on: 15th Jun, 2010 03:34 am
I am sorry to scare you, but I actually got an overfraft fee, while my file was in underwriting and they did not want to see a VOD- which I tried to send to my loan officer instead of letting them see the entire bank statement. They wanted the Bank statement. Nonetheless, my loan still got approved from Wells Fargo. Sometimes it depends on the underwriter
Posted on: 17th Jun, 2010 01:40 pm
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