Financing and Lending Turmoil

It's been almost a full month since we've updated you and mainly, there just hasn't been much news to inform you with so we've laid low. However, there is a trend we're seeing that is making things difficult to finalize the purchase of your new home and we'd be remiss not to tell you about it, our job from the beginning is to guide and protect you from the pitfalls of any market and this needs to be mentioned. The guidelines we have used for years regarding pre-approving customers are changing sometimes daily and I mean this in a literal sense. What this forces us to do is consider every conceivable issue that could come up in the process to assure you don't get to your commitment date and find out the approval doesn't stand any longer. This is much easier said than done. The examples are many but allow me to give you just one. A borrower comes to me as a trusted friend and associate and would like to take advantage of the current market. Being that I feel very confident in what I do, I move ahead and get all the information needed and turn in the loan for the pre-approval. The information is run through the FHA decision engine and comes back approved. I confidently send my client out to find there new home and they did, quickly. We get the remainder of information that is pertinent and chose an investor with the premium rate available that day. To my surprise, the loan is denied in a few days due to credit score. Keep in mind the FHA decision engine approved this loan knowing the scores but obviously found merit in the rest of the findings. The reason for the denial? The lender has adopted their own set of rules and DO NOT have to use FHA guidelines. They can stipulate anything they want above and beyond the FHA guide and there's not a thing that I or anyone else can do it. Unfortunately, when these changes are made, nearly every other lender out there follows suit. What this does is leave my borrower in a position either with a deposit or the loss of a home they desperately want, not to mention the fact that my credibility is quickly brought into question. This blog is not to scare you from attempting a home purchase, it's only intention is to let you know to be very cautious of a pre-approval you get from someone asking if your credit is good and just faxing you over a letter saying your all set. There are many things to be considered and questioned so that you know what is solid and what is not. Even then, there's no way to determine the fact that a rule change may hit while you are in process to purchase and be an issue. Scott and I are taking every possible measure to see this doesn't happen in the future and will keep you updated as things ease up. Until then, call or e-mail and ask us any questions or voice any concerns you have regardless of who you are working with and we'll take all the time you need to get a better understanding of your personal situation.