Unfuckingbelievable.

Wife and I have run the gauntlet and *should* be closing soon. There have always been hoops to jump through but this shit is getting ridiculous.

Our stats: Double income (combined >$100K), no kids. Own one vehicle, other is financed. Last payment on our current house goes out next week. Our 3 credit scores are all over 800. No credit card balances. Both have 401K's. No other outstanding debts. We're putting 20% down so no PMI.

Now, one would think that we're a slam-dunk, right? Oh noooooo.......that little lovely aspect of home loans called an underwriter rears their ugly head. I'd like to slam that bitches face off her desk a few times––-quite a few times. Every fucking time we turn around, after being told by the loan officer that "This should be it" we get a call a day or two later with some other bullshit the underwriter needs. This form, that form. Couple forms of ID with SS#'s. Obviously some of it is to be expected.

However, a few have chapped my ass royally. We're using a loan from my wife's 401K to make the 20% downpayment. Our intent is to move and then sell our current home at our leisure without having to make 2 mortgage payments, then pay back the 401K loan with the proceeds of the sale. Financially sound.

Well, you'd think we just walked outta the projects and we're trying to buy a McMansion with stolen money. Obviously gotta show where the downpayment money is coming from. Okay, whatever (I anticipated that). Then they want documents showing what is left in the 401K. You would think that they could just take the 401K statement we had to give them and do the math. Nope, gotta be something seperate. Then they want something showing that she can access the rest of the money if she lost her job. Well no shit Sherlock, it's her money. Once again, the obvious ain't good enough. Gotta find some kind of statement to that effect (even Charles Schwab, the 401K company was like "WTF?" when we told them that).

Then we have to initial the bottom of every page of the contract, despite the fact that we signed/initialed everywhere we were supposed to. Oh, gotta go to the house and get the seller to do the same. Her husband died a few years ago and she has to FAX a copy of the death certificate to prove he's dead.

ICING ON THE CAKE: We have to show, despite all of our outstanding credit/assets/no liabilities AND 20% down that we have a $10,000 "reserve" fund in case of financial emergency!!! I was like WTF? Loan officer sheepishly (he knows I'm getting more than a little annoyed by this process by now and I'm sure he hopes my wife will answer) says "Well it's a relatively new thing since the credit crisis came up". I have never heard of bullshit like that. Fortunately the wife has as much left in her 401K as we are borrowing so it isn't an issue. But still.......

I'm almost hesitant to ask this as I'm sure I'll be lambasted for it, but if I was a member of a "special" class of folks would these hoops need to be jumped through? I know one group who'd likely have trouble coughing up a SS#, especially on several documents.



I HATE UNDERWRITERS

I knew they were going to up the requirements, but to go from "Yep, you have a pulse" to what you went through is kinda silly...

Well, sounds like somebody got up on the wrong side of the bed this morning. (J/K Martin)

Been getting up on the wrong side of the bed since this started! I knew there were hoops so to speak but this is something I never anticipated. This will be our third home purchase so it ain't our first rodeo. Hell, it was easier to get the past two loans without the 20% down and paying PMI.

Going through that crap now.   Our prospective house needs a new septic system.  Seller is paying for it and we already have a contract in place saying that it needs to be inspected by the state and pass yada yada.  Damn bank will not let us close without it being completed.  Even if money is put in escrow for the job.  It is a zero risk situation for them and yet they won't let us close before 100% completion.  Makes no sense.

You are not on welfare, why would they finance YOU?

You need and extra $10,000 in cash just laying around on top off everything else or they won't authorize the loan?

Did I read that right?

You can thank Barney frank and Chris Dodd.

I hate to say it, but im in the reale estate industry, on the title side of things, but IMHO it sounds more like the lender is sloppy then the actual requirements. It is tougher these days, but the underwriter should list all of the conditions at one time not fifty million seperate ones. Hang in there youre almost done. If all else fails ask the lender for a credit on some closing fees due to their lack of organization. I hope you are getting a great rate to deal with that underwriter.

Find another bank.

should of been this way for the last 6 years maybe we would not be in this mess.

Also the 10k in reserves is probably to prove that you can pay closing costs but they shouldve explained that to you so if its not that then I have never heard of anything like it.

I was going to post just about the same thing, we've bought/sold in the last year and both deals went quite smooth.

Thats nuts are you telling me they want you to have some cash put away for emergency, before
you buy a home.

They are evil

I havea credit score of 700, I CAN NOT get a loan anyware!

Yep. At least not for a non-PMI, decent interest rate loan.

Oh I do. Every day.

The era of free credit is over.  Get used to it.

4.375%.

15 years.

You should be able to get an FHA loan but there are other factors beyond credit. FHA "does not discriminate based on credit", however the investor buying the loan does. Most FHA loans require a minimum score of 620 so don't know why you could'nt

Our closing costs are being financed with the loan, so it ain't for that.

I detect your sarcasm but that hasn't been the standard. 20% down and EXCELLENT credit used to be enough.

Ask for a better rate  ours is 3.875 15y





 

Did you read what I wrote? 20% down is hardly "free". We're hardly "risky" candidates.

Thats a really good rate im assuming a fixed 15 year rate but its good. Sucks that they are so sloppy. Another thought, is it a mortgage broker by chance or lender. Don't know if you are aware of the diff, but most brokers and i say most not all stink. They have to take the loan to a bank to apporve instead of the bank doing it "in-house". Hope that made sense.

That's not the point.
You have the money for the down payment.  You have good credit.  You have good jobs.  You low debt.
Loans are risky, take the risk or turn them down.  Don't keep them on the line fucking with them.

Besides, if they had large amounts of cash laying around they wouldn't need the damn loan.

When I bought my first condo 25 years ago it was like this with 20% down.

 

It's through Heritage Bank. The underwriter is on their payroll too, so it's not like she's a freelance one.

I just went and got a 25k loan on a new SUV and got approved within 2 min. My 140k home loan took about 15min.

Never heard of anything like that.....

Through who?



ETA––-the new truck I bought in March took about the same. The dealership finance people said they didn't have a rating high enough for our status!

Well the good news is you are getting a great rate and will soon be in the new house so try to look at the glass as half full even though the process has sucked.

We refi'd a little while back and it was the same shit, it's actually how it should have been all along.

Yeah, I just want it to be over with. I knew credit had tightened, but jeesh......

I think you just got a bad lender thats all Good luck

Wells Fargo for the car, local bank for home loan.

Try dealing with it on a daily basis being a mortgage broker.  

It seems like every deal is a fight right now.

As far as the $10,000 reserve requirement, you can thank everyone who bought a house when the bottom first fell out of the market and they walked away from their old place.  The rule is now that if you are retaining your previous property (even if it's under contract and not sold at the same time you close on the new place) you have to have 6 months of principal, interest, taxes, and insurance in reserves.

I had a deal that got killed a month or so ago.  The appraisal came back with the property at 1400 square feet, the county had it at 1200 square feet.  The underwriter wanted documentation on the discrepancy between the two and if any additions were made there had to be permits from the county issued.  The house was 100 years old, had been sold 3 times in the last 3 years, at least once due to forclosure.  Needless to say the current owners had nothing to document the difference between the square footage, no records of any permits pulled at the county...dead deal.

I've been doing this for ten years, the changes that have taken place in the last year or so are a little bit extreme in my opinion.  I have a feeling that before too long I'll be legislated out of a job.  The rules and regulations that are currently in place seem to be written by someone with no experience in this field.  There were several changes instituted that allegedly were to protect the consumer...they don't.  The Home Valuation Code of Conduct for instance has only added another fee to the borrower.  Appraisals are at least $100 more expensive than they were.  Back in the day ( a year ago), I could call my appraiser and say Joe Blow is looking to refinance, he thinks his house is worth $200,000.  The appraiser could do comp searches and come back saying it is worth that, or no it's not.  If the answer was no it's not...then nobody is out anything.  These days I have to take Joe Blow's word for it, order an appraisal (Joe Blow pays for it when it's ordered) it comes back at $175,000 poor joe is out $445 for an appraisal that does him no good.

The changes for the good faith estimate can screw the borrower as well.  Now all fees charged to the borrower, including the compensation to the broker from the lender are shown as a fee.  The broker compensation is then issued as a credit back to the borrower. The total fee cannot change, but the credit back to the borrower can change.  Now if I quoted somebody a loan making my company 1.5% on a $100,000 loan, and due to rates worsening that compensation is changed to 1%, guess what...the borrower is going to be out of pocket that .5%.  I personally stick to what I've told the borrower their total charges are going to be and end up crediting that .5% back to them rather than charge it, but I'm certain that not everyone in this business has the integrity that I do.

they do not have the cash for down payment  and for now  taken a loan from the 401K

and I don't think of 10 grand as large amount of cash

I got the lowdown on underwriters as they were always a mystery-man (woman) to me. Apparently they get a "rating" of sorts based upon how many loans they underwrite that end up being defaulted on for one reason or another. Apparently they guard their "rating" most tenaciously.

If I didn't know better (and I don't) I'd swear they were trying to find something we couldn't come up with so we'd either have to pay a higher interest rate or pay PMI (or both).

Yes, I read it.  Any loan today is a huge risk, especially with real estate rates still driftling down and likely collapsing again if and when the Fed is forced to raise rates.  I just bought my house last October, same as you with two incomes, one truck payment and no other bills.  I put 40% down because I want as low a payment as possible.  I will likely pay it off early also.

But my statement stands.  In today's economic environment, every real estate loan today is a risk for the lender.

The problem is in the secondary market, smaller lenders end up selling their loans to bigger lenders on the market, and if the file is out of whack even the slightest bit the origional lender has to "buy back" the loan so they scrutinize heavily.

I put 150K down on my house, they still gave me shit when it came down to loan time.

Except that our current home will be paid off next week. We're not going to carry two mortgages.

On what, a $1.5 million house?

"The Fed is forced to raise rates" first off we should not worry about rates we should worry about deflation and the risk of our dollar. Not if and when the fed raises rates deflation is way worse than inflation

No, but I have a paid off home as of next week worth more than we're borrowing. Besides, the 401K is her money.


Well good for you. I ain't rich.

No doubt and its not a loan from the 401k its a distribution, and is probably accompanied by a fee for doing so.

Had a friend down the street that sold his house for $950,000. The guy that bought it didn't want to do all the crap that you have to do so he brought a brief case full of cash. My buddy about shit himself but the deal went through with a 2 week escrow.

BTW: He banked 550K after all was said and done.

No a 300K house.



My wife, the realtor, myself, everybody involved were like:



 

whats this loan thing you're talking about?

pay cash and give em the finger