Posted on: 21st Aug, 2011 03:27 pm
this website has a lot of great information, but it doesn't answer my question regarding whether non sufficient funds fees on bank statements will ruin our chances of va loan approval.
my husband and i have been with our bank for 5 years, and have never had an issue with nsf. our debt to income ratio is low -- we only pay on 2 cars and 1 credit card, with $700 on it and a $5000 limit. our credit is good and our payment history with all bills is stellar. we have, however, accumulated 1 nsf charge a month since may - all well under $100. we have been caring for my sick grandmother, and many things have been neglected -- along with checking our account balance daily. the charges overdrafted into our savings. we make more than enough to cover our bills, and the mortgage we're applying for will be almost $100 less than our current lease. it's just a matter of monitering our account so we know not making certain purchases if our balance is getting low, which we have started doing again on a regular basis. while we have a lot going on, it is no excuse for financial issues, and we're concerned that this will keep us from becoming home owners.
my question is, how do va underwriters view nsf charges? will a good loe explain them away, and allow all of the positives on our loan application to overshadow this, or should we plan to renew our lease?
my husband and i have been with our bank for 5 years, and have never had an issue with nsf. our debt to income ratio is low -- we only pay on 2 cars and 1 credit card, with $700 on it and a $5000 limit. our credit is good and our payment history with all bills is stellar. we have, however, accumulated 1 nsf charge a month since may - all well under $100. we have been caring for my sick grandmother, and many things have been neglected -- along with checking our account balance daily. the charges overdrafted into our savings. we make more than enough to cover our bills, and the mortgage we're applying for will be almost $100 less than our current lease. it's just a matter of monitering our account so we know not making certain purchases if our balance is getting low, which we have started doing again on a regular basis. while we have a lot going on, it is no excuse for financial issues, and we're concerned that this will keep us from becoming home owners.
my question is, how do va underwriters view nsf charges? will a good loe explain them away, and allow all of the positives on our loan application to overshadow this, or should we plan to renew our lease?
I'm not qualified to answer as a VA underwriter, but can give you a generic answer.
NSF charges on a checking account are held as a matter of sloppiness. If you're sloppy with how you handle your checking account, you might be sloppy in handling your mortgage payment. You will be best-served to provide a detailed explanation that plays on their hearts.
I believe that "all of the positives" may well overshadow their opinion that you don't know how to handle a checking account, but it's going to be difficult with some underwriters, while others will accept whatever you say. Pray you get the latter type, and prepare the most eloquent explanatory letter you can.
NSF charges on a checking account are held as a matter of sloppiness. If you're sloppy with how you handle your checking account, you might be sloppy in handling your mortgage payment. You will be best-served to provide a detailed explanation that plays on their hearts.
I believe that "all of the positives" may well overshadow their opinion that you don't know how to handle a checking account, but it's going to be difficult with some underwriters, while others will accept whatever you say. Pray you get the latter type, and prepare the most eloquent explanatory letter you can.
thank you, george!
that is what i have been thinking, just needed some sort of confirmation -- would prefer the positive, but honesty is always better :) i am so frustrated that this has happened at the worst possible time. the way our account statements are sent out, the one for june/july shows one overdraft, and the one for july/august doesn't show any. so far, they are only asking for 60 days worth and my hope is that they won't accept account statements back through may, or will accept one "clean" account statement with vod's to cover the months with nsf charges. unfortunately, our processor is not helpful and difficult to reach, so i feel like we're left to our own devices to figure out how to deal with this.
is it appropriate to write a loe with an emotional spin? i have gotten several suggestions -- some people say to keep it short and professional, while others, like you, say that what's been going on in our personal lives needs to be discussed in order to fully understand how we could let things slide.
any and all information is appreciated. honestly let's me know what to expect :)
that is what i have been thinking, just needed some sort of confirmation -- would prefer the positive, but honesty is always better :) i am so frustrated that this has happened at the worst possible time. the way our account statements are sent out, the one for june/july shows one overdraft, and the one for july/august doesn't show any. so far, they are only asking for 60 days worth and my hope is that they won't accept account statements back through may, or will accept one "clean" account statement with vod's to cover the months with nsf charges. unfortunately, our processor is not helpful and difficult to reach, so i feel like we're left to our own devices to figure out how to deal with this.
is it appropriate to write a loe with an emotional spin? i have gotten several suggestions -- some people say to keep it short and professional, while others, like you, say that what's been going on in our personal lives needs to be discussed in order to fully understand how we could let things slide.
any and all information is appreciated. honestly let's me know what to expect :)
also, our bank charges fees with each overdraft that is transfer out of savings. i have gotten our bank to reverse the charges because we have such a good history with them and have never had a problem before. will that be helpful when trying to appeal to the underwriter?
GG, your last post talks about the bank reversing the charges...if that's the case, then I'd have to think that this whole business is less of an issue than you think.
You apparently don't have an automatic transfer in place, or else you'd never have to incur those fees to begin with...is that right? And the transfer from savings to checking would seem to indicate to me that you've got sufficiency in funds, but that it's not being directed properly at a critical point.
Forget that last sentence - it looks like a criticism. That the bank will transfer funds for you and waive the fees they've already charged is in your favor, I believe.
Another thing to think about is doing an online statement, if that's available, and giving your lender the August (fee-free) and an up-to-date online version as soon as it's reasonably close to a full month.
Some processors are good, some bad...just like cops, lawyers, mortgage officers, wives, husbands...I could go on and on. Maybe your processor is swamped and not able to catch up with you. Let's hope he or she gets with the program soon.
You apparently don't have an automatic transfer in place, or else you'd never have to incur those fees to begin with...is that right? And the transfer from savings to checking would seem to indicate to me that you've got sufficiency in funds, but that it's not being directed properly at a critical point.
Forget that last sentence - it looks like a criticism. That the bank will transfer funds for you and waive the fees they've already charged is in your favor, I believe.
Another thing to think about is doing an online statement, if that's available, and giving your lender the August (fee-free) and an up-to-date online version as soon as it's reasonably close to a full month.
Some processors are good, some bad...just like cops, lawyers, mortgage officers, wives, husbands...I could go on and on. Maybe your processor is swamped and not able to catch up with you. Let's hope he or she gets with the program soon.
i believe we are signed up for overdraft protection. when you get to a zero balance, the bank transfers money out of your savings account to cover you but charges a fee for their efforts. our savings account serves as a buffer. i called the bank, and they said that it definitely was an error on our part, but that we are in good standing and have never had an issue before, so they credited the fees back to us...now that i've explained it in more detail, does it still sound like less of an issue?
Yes it does...that they charge a fee is typical. Not only that, but you have a 2-month period recently in which it only happened once. You ought not to have to provide a year's worth of statements, as you know. And in a pinch, you have the heart-rending story.
I think you're probably okay.
I think you're probably okay.
thank you :) i realize we are not out of the woods until we close, but your answers will definitely help me sleep tonight.
enjoy your evening!!
enjoy your evening!!
george --
sorry for the continuing questions. since we are unable to get ahold of our processor, you are the best resource we have!
the bank crediting the fees back is great, and very kind of them. i hope that it will show the underwriter that they trust us and help to prove the fact that overdrafts are not typical for us.
since our processor is pretty uninvolved, i am in the process of typing up a loe and will send it over without anyone having to ask for it. in the loe, how do i address the fact that even though the fees were refunded, we didn't have the money in our checking account to cover our expenses, and money had to be drawn out of savings by our bank...but we still want them to approve our loan? i just feel so irresponsible and very overwhelmed by having to explain our mistake.
also, i realize that not everyone has a perfect history, and certain negatives weigh heavier than others...i would hope that since we had the money in savings, do not have a history of this, pay bills on time, have never had anything go into collections, etc, it would make nsf charges seems like less of an issue. are nsf charges ever a deal breaker alone, or do they have to go hand in hand with other issues?
also, we are first time buyers...which may be obvious because of all of the questions :)
sorry for the continuing questions. since we are unable to get ahold of our processor, you are the best resource we have!
the bank crediting the fees back is great, and very kind of them. i hope that it will show the underwriter that they trust us and help to prove the fact that overdrafts are not typical for us.
since our processor is pretty uninvolved, i am in the process of typing up a loe and will send it over without anyone having to ask for it. in the loe, how do i address the fact that even though the fees were refunded, we didn't have the money in our checking account to cover our expenses, and money had to be drawn out of savings by our bank...but we still want them to approve our loan? i just feel so irresponsible and very overwhelmed by having to explain our mistake.
also, i realize that not everyone has a perfect history, and certain negatives weigh heavier than others...i would hope that since we had the money in savings, do not have a history of this, pay bills on time, have never had anything go into collections, etc, it would make nsf charges seems like less of an issue. are nsf charges ever a deal breaker alone, or do they have to go hand in hand with other issues?
also, we are first time buyers...which may be obvious because of all of the questions :)
Hi girlygal,
Well... I don't think NSF charges alone can be a deal breaker. If you have other negatives, then they combined with NSF charges can be a deal breaker.
Well... I don't think NSF charges alone can be a deal breaker. If you have other negatives, then they combined with NSF charges can be a deal breaker.
today i found out that -- for some reason -- we have a new processor. i am actually very relieved! she's called me twice today and emailed me a couple of times. SUCH a change. she said not to worry at all about the nsf charges, since their underwriters are really only looking to verify that the funds in our account are truly our own. hopefully she's right! i told her that i'd typed up a loe and she said she'd run it by the underwriting department and see if they think i need to change it up at all. between her reassurance and all of the advice i've gotten on this forum, i feel very hopeful that our loan will be approved! i will try to continue to update because out of all the searching i've done looking for a similiar situation, no one ever shares whether their loan was approved or not! thanks everyone :)
Congratulations to you!! and of course do share the updates within us!! :)
Here I am 6 days later, having been busy all week long and then knocked powerless by Irene (Goodnight Irene!).
The new processor apparently has some sense inside her, and that's gratifying. Lacking the funds in the checking account but having a backup with the savings account is common practice. Back when savings accounts used to actually pay you real money (interest), it made no sense to keep a balance in checking when it could simply be transferred as easily as that. You have been doing the right thing all along, and your loan ought to sail through. I sure hope it does.
The new processor apparently has some sense inside her, and that's gratifying. Lacking the funds in the checking account but having a backup with the savings account is common practice. Back when savings accounts used to actually pay you real money (interest), it made no sense to keep a balance in checking when it could simply be transferred as easily as that. You have been doing the right thing all along, and your loan ought to sail through. I sure hope it does.
hello everyone - we are officially in underwriting! our seller is being incredibly difficult since the appraisal came in $5k under what we offered. instead of closing on the 16th as planned, he is demanding to close on the 2nd! thought it's not a terrible thing since it will mean less time to worry. our new processor is amazing, and i am fairly confidant that everything will be wrapped up in time to close on friday :) i'll keep everyone posted...
lyndsay
ps -- thanks george! :)
lyndsay
ps -- thanks george! :)
just an update -- our loan was approved and we are closing on friday the 2nd :) our file was in and out of underwriting within three hours and no additional documents were requested. so, everyone else in a panic about nsf charges -- if your file is otherwise strong, try not to stress. also, our processor said that the underwriter appreciated the fact that we submitted an loe up front addressing the nsf charges instead of ignoring them or hoping that the underwriter would miss them. just be honest and open right from the start. it'll get you far :)
GirlyGal, congratulations are in order...not only for obtaining the mortgage that you wanted, but also for the complimentary words from the underwriter. Solid underwriters have that sort of attitude about borrowers, being appreciative when they receive things that aren't necessarily going to be requested, but which show that a borrower is on top of his or her game from the get-go.
I trust that your closing went well the other day, and that your seller isn't too put off by a measly $5K difference in appraised value. If it had no impact on your transaction, then the seller has no real complaint anyway. If, on the other hand, it meant a slight reduction in price and net profit, at least the seller can be happy about selling the home at all. Many folk are stuck in their properties with little or no opportunity to sell at all.
Again, I wish you well, and you're most welcome for any assistance rendered.
I trust that your closing went well the other day, and that your seller isn't too put off by a measly $5K difference in appraised value. If it had no impact on your transaction, then the seller has no real complaint anyway. If, on the other hand, it meant a slight reduction in price and net profit, at least the seller can be happy about selling the home at all. Many folk are stuck in their properties with little or no opportunity to sell at all.
Again, I wish you well, and you're most welcome for any assistance rendered.