How can you be approved for a mortgage and then denied right before closing?

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We applied and were approved for a refinance on our mortgage. The day before closing the underwriter says that the expenses we claimed in our tax return last year(approx $ 20k) were to be deducted from the income and therefore the ratio was off. I’ve never heard of this. I assumed that this
would have been looked at before approving the loan. Does this make sense? So I faxed the broker the last paycheck stub for 2006 that showed the total expenses reimbursed for the year were $ 9300. Shouldn’t that be considered and offset the expenses paid out. Does anyone know what to do in this case?

  1. Reply
    General Custer
    April 29, 2011 at 9:27 pm

    Did you have a written commitment or just a preapproval? Sometimes what borrowers consider as income is not the same as what the lender does. Maybe the loan officer made a mistake and is now trying to cop out. You can complain to his regulator.

  2. Reply
    April 29, 2011 at 10:02 pm

    Due to the high level of recent foreclosures, banks/lending institutions have tightened their lending criteria. It is also possible that the loan officers accounts were audited by a manager and the oversight was seen.

  3. Reply
    Casey C
    April 29, 2011 at 10:25 pm

    There are lots of innept people that work in this industry. If you like, I can go through your information and see what’s really going on.

    You’re correct, this issue should have been found within a week of you delivering your paperwork to your loan officer. Once he forwards it to an underwriter it may take them a couple of days to verify it, but your loan officer should have the skills to see any problems before they come up.

    you can email me or visit my website for my contact information.

    I can usually turn deals within 2 weeks. I hope that will work for you. By the way, I work for Chase and am licensed nationwide.

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