Mortgage Process Experience

The Mortgage Process Experience Can Be Stressful

I had the pleasure and honor to meet Mary B. as a borrower and now we have become lifelong friends. Mary B., like many, fell victim to the 2008 Real Estate And Credit Meltdown and due to the Great Recession of 2008 consulted with a Bankruptcy Attorney. Since she had a great reduction of income and had outstanding debts where she needed time and help in restructuring her debts, she was advised to file Chapter 13 Bankruptcy from her Bankruptcy Attorney. Back in 2010, Mary B. filed Chapter 13 Bankruptcy and was assigned a Chapter 13 Bankruptcy Trustee where all of her debts were restructured and entered into a Chapter 13 Bankruptcy Repayment Plan . Mary and Al worked very hard and satisfied her Chapter 13 Bankruptcy Repayment agreement and had her Chapter 13 Bankruptcy discharged in November 2015. She has made all of her payments as agreed under her Chapter 13 Bankruptcy Repayment plan, however, there were two issues that created havoc in her qualifying for a FHA Loan After Chapter 13 Bankruptcy Discharge .  One was a late car payment during her Chapter 13 Bankruptcy repayment period and the second major issue she had was that she had a mortgage loan on her home that she had it outside of the Chapter 13 Bankruptcy Repayment plan where the home sold and closed in December 2015. Unfortunately, there was a delay in closing her mortgage loan on her home and the mortgage lender, Bank of America, has reported her with a 30 day mortgage late, which not only plummeted her credit scores but a mortgage late on your credit report in the past 12 months and after a Bankruptcy is a deal killer in getting a mortgage loan approval.

Mortgage Process Experience: How Do Mortgage Lenders View Late Payments

Late payments is extremely frowned upon by all lenders. Not just mortgage lenders but any other lenders as well as creditors. A consumer’s payment history is what determines the financial responsibility a borrower has and most lenders look at the borrower’s payment history in deciding and predicting the likelihood on how timely they will be in paying their future monthly debts. Majority of banks and mortgage lenders will automatically disqualify any mortgage applicants who have had any late payments after a bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, or loan modification. However, there is light at the end of the tunnel and I specialize in mortgage loan programs with no lender overlays and often can help borrowers who had late payments after a bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, and loan modification.

Just because a mortgage loan applicant has high credit scores does not mean that they automatically qualify for a home loan. Credit payment history is equally as important, especially timely payment history for the past 12 to 24 months.

Mortgage Process Experience: How I Met Mary And Al

Mary B. researched the internet and was looking for a FHA mortgage lender with no lender overlays and contacted me after reading one of my many blogs on Qualifying For A FHA Loan After Chapter 13 Bankruptcy. Due to her recent late payment on her mortgage, her credit scores plummeted to under 600 FICO. I was not too concerned about her credit scores being under 600 FICO because the minimum credit scores required to qualify for a FHA Loan in California is 580 FICO and she met all of the minimum credit and income requirements. The recent late payment on her mortgage after a Chapter 13 Bankruptcy discharge was a concern for me plus a late payment for an auto loan that was over 30 days late into her Chapter 13 Bankruptcy Repayment Plan. All Chapter 13 Bankruptcy mortgage loan applications are manual underwriting if the Chapter 13 Bankruptcy discharge has not been discharged for at least 2 years so the Automated Underwriting System will not tell me whether or not the late payment of her auto loan or the late payment right after her Chapter 13 Bankruptcy discharged date will become an issue. I contacted my FHA Underwriting Manager and our Director of Underwriting and ran over this case scenario with them. After thoroughly reviewing Mary B. file, both the Underwriting bosses gave me the green light and told me that they can overlook the auto loan late payment as well as the recent mortgage late payment after the Chapter 13 Bankruptcy discharged date because Mary had a lot of compensating factors which included a second job as a university professor where she was there for 18 months and that income was not used to qualify and she had more than enough reserves as well as her primary employment as director of accounting, she has been there for over 14 years. I then issued a solid pre-approval letter to Mary where she went home shopping.

Mortgage Process Experience: Buying A Home From A Home Builder

Mary and I became really great friends while she was shopping for a home. Mary and Al always called me if they had any questions and we talked daily, not always about mortgages and became the best of friends. Mary then found a home she really loved but the home was a new construction home. This is when her nightmares began. The builder she went to told her that she needed to use the builder’s preferred lender in order for her to get closing cost credits and builder’s incentives. If she were to use me, the home builder would not give her any closing cost credits nor builder’s upgrades. This practice is totally illegal and it is called Anti-Steering where Home Builders Are Steering Home Buyers To Their Preferred Lenders . The home builder was pretty blatant about it. The preferred lender was WJ Bradley Mortgage Corporation. Mary and Al, who were extremely loyal to me, told me about this. I told them if WJ Bradley Mortgage Corporation can do their mortgage loan, just to go with them because the home builder is offering incentives only if they used their preferred lender although it was totally illegal.

WJ Bradley Mortgage Corporation guaranteed Mary that they would have absolutely no issues with getting their FHA Loan After Chapter 13 Bankruptcy discharge with the mortgage late payment approved and closed. Long story short, the loan officers of WJ Bradley Mortgage Corporation contacted Mary and told her that her mortgage loan got denied due to her late payment after the Chapter 13 Bankruptcy discharged date. To top it off, WJ Bradley Mortgage Corporation has completely shut their doors and are no longer in business.

Mortgage Process Experience: Mortgage Lender Overlays

I thought I was in luck and I was going to originate and fund Mary and Al’s FHA Loan, however, at the last minute, my company lost our main investor who had no lender overlays on FHA Loans After Chapter 13 Bankruptcy discharge date and the two investors we had required a one year waiting period after a discharge of a Chapter 13 Bankruptcy discharged date. I frantically searched for another lender where they did not have any waiting period requirements after a Chapter 13 Bankruptcy discharged date and found one where I helped Mary’s family and the new mortgage lender coordinate the file transfer. Long story short, Mary’s family have closed on their home yesterday, April 6, 2016 and now have the keys to their new home and called me yesterday to thank me. The mortgage process experience can be extremely stressful, however, if there is a will, there is always a way. Congratulations to Mary  and the whole Family on their new home closing in California.

Mortgage Process Experience: Letter By Mary And Al

Like to thank Mary and Al for the kind note they have sent me and my staff:

Hello, All:

We are Mary And Al. Pardon the interruption, but we wanted to say hello and publicly acknowledge (or embarrass) Gustan Cho of Gustan Cho Associates.

Gustan Cho is an amazing friend, professional and trainer – if you are receiving his informational emails, consider yourself fortunate.  We do.  Even after we went with a builder’s preferred lender, Gustan Cho stayed the course, and continues to advise us along the way.

Our goal is to help others and be a consistent, reliable and innovative part of Gus’ team.

We look forward to partnering with all of you as well.

Sincerely,

Mary And Al B.

(a.k.a. fans of Gus)

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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