Friday, July 1, 2011

So Gather Up Your Jackets

I'm a little worried about writing this post, as I know I will forget something or not explain things as clearly as they should be explained. My apologies in advance.

As I mentioned in the previous posts, I've been spending a lot of time getting my mortgage company all kinds of documentation to satisfy the ever-picky underwriters. Two days ago, I got yet another email full of requests, this time I had to get the following:

Proof that my student loans are deferred for 12 months from closing date
Copies of the checks shown in my bank statements (these were already explained)
Another letter of explanation for another deposit in my bank statements
Amanda's Driver's License (apparently her passport doesn't count. I guess you need to be able to drive to cosign on a house)
Paystub for the 30th

Please keep in mind that I had, literally, one day to furnish all of this crap to close on time. I was livid. I fired off a mildly vulgar email attacking the character of underwriters, then got to work.

I went to the mortgage office with some of the info and had a quick chat with those folks. I found out that the underwriters not only won't count Amanda's income towards the loan (since she doesn't have two years of W2's, so her money is no good), but they also won't count the $2,100 per month income from the rental property. In order for that income to count, I would need all three leases to be for one year starting on the closing date. That's insane.

Because those two real, actual incoming money streams don't count at all in my real actual income my debt ratio was at 56.6%. In order to be approved by the underwriters, my debt ratio needs to be at 54%. For real.

I can't even begin to describe how frustrated I was to hear all of this. All incomes (work and rental) considered, Amanda and I pull in over $130k annually (for now). That obviously works out to be over 10 grand a month. The mortgage on this house is going to be, with taxes and insurance, a bit over $1,200 per month. The other mortgage is also around $1,200 per month. Both of those bills chew up a measly 25% of our income. Of course we can't afford this place, and thus, shouldn't be underwritten...

Discussing things further, I asked about that first request from them. Why would I have to ask to have my student loans deferred? It turned out that in order to get the debt ratio back to acceptable for the underwriters, they needed to shave $200 from my monthly expenses. In order to do that, the mortgage folks suggested calling my student loan people and telling them that I have had some financial hardship and thus, can't pay my bills.

I gave them a call and asked some preliminary questions about what qualifies and what doesn't. I found out that my percentage of income to debt (there's that stupid number again) isn't good enough to qualify for deferment. Besides, it was apparently going to take 7-10 days to get all of that squared away. It seemed that my only option for closing on time would be to lie to my student loan lenders and say that I was jobless and thus, couldn't pay. I would have to fill out a form or two, then write an explanatory letter to them, and sign it.

I took this info to the mortgage folks and made everyone sad.

They then asked me about my current mortgage in providence and why it was so high. I told them the following story:

The house I own in Providence was insured by Travelers on the day of the closing. I made sure to tell them that the property was in need of renovation before we moved in, they said "fine" or something to that effect and underwrote the policy. A short time thereafter, they had, as is customary, an inspector take a look at the property and send a report to the company thereafter.

The company got the report and decided that, despite my admission upon purchasing the policy, that the home wasn't livable and thus, they were cancelling my policy. They were nice about it and gave me a few months before cancelling, but were still cancelling.

A few months went by and I was busy fixing my burned house, I had repeatedly attempted to get new insurance. I was finally successful shortly after my house was kind of broken into, but there had been a short time between coverages. In the time between the policy from Travelers being cancelled and my new policy being paid for, my mortgage company had apparently placed super expensive and ultra useless (only covered the structure) forced insurance upon the property.

Because of this, my mortgage payment jumped over one thousand dollars per month higher. Since I had set up automatic payments through my bank, I kept on paying the mortgage as if nothing had happened and kept tearing up the mortgage bills before I even opened them. Plus, when I had secured that second insurance policy on the house, everything should have gone back to normal. I'm not exactly sure why I would have thought that anything about that house would go in any "normal" fashion, but chalk it up to youthful naivete I guess?

Back to the high mortgage payment questions from my new mortgage folks. In short, my payment was still showing up on my credit report as gigantic.

I called up M&T Bank a few weeks ago to find out why (after I took a look at a mortgage statement). According to M&T, I still had that crappy and expensive forced insurance on the property. I found that odd, since I had paid three and a half grand seven months ago to Progressive to insure the place.

I called Progressive and complained to them, then had my insurance info sent back to M&T, including the date of the policy in hopes that this would clear things up (as remember, I needed to clear $200 per month from my debts in order to get this loan underwritten). i then called up M&T to find out how long all of this would take. A few weeks, obviously.

I let the mortgage people know this information and they lit up. They told me to force this process along in hopes of getting confirmation that a grand would come off of my mortgage payments and I wouldn't have to lie to student loan giver-outers.

I got onto the phone with M&T immediately thereafter to see how I could help myself out. M&T said that I basically couldn't.


They let me know that they were waiting on Progressive to give them the 'refund number'. Basically, how much money that M&T had to give back to me for overpaying. Once they had that, they could figure out what my new mortgage payment would be.

I let the mortgage folks know all about this and they didn't say anything until I asked them about it the day before closing. Did I mention that all of this happened the day before the closing was scheduled? It did. I was an anxious/angry mess.

They let me know that they were trying to get verbal confirmation that my mortgage payment was going to drop and thus, my credit report could be updated and thus, the underwriters would approve the loan and thus, I could live in a house in Texas.

The next morning, I called up the credit bureau and they conferenced in the folks from M&T. Miraculously, they had received that refund number, but still had to wait for the loan service people to get clued in and drop my mortgage payment. I pleaded with both of the women on the line for acceptance of a verbal estimate of the new payment. I reminded them that the closing was scheduled for 11:30am, or two hours from the time of the call, and that this was the only chance of actually getting closed on this house.

I finally pried an estimated monthly payment from M&T and whined enough to get the credit gal to accept it.

Hooray! The closing is still on!

Record scratch sound they play in bad comedies where everyone stops and looks at some awkward interaction!

The underwriters needed that information the day before (about 15 hours after they saddled me with more documentation to track down) if they were going to fund the transaction on time. They didn't get that information.

Long story concluded: we closed on the house a day later and now I own two rental properties. Once the 15th hits, I will own one rental property and a house to live in.

This post is too long and was a chore to write. On the bright side, my writing will once again die down, as there is nothing to write about until we move in. I may write about how much money we spent this weekend, but who knows?

No comments: