[ctviggen]

We're trying to buy a house.  Our sole debt is a car payment (and our house, which soon will be sold; that is, the closing occurs before we close on the "new" house).  My credit rating is over 800 for all three credit companies.  We're putting 20% down (NOT using proceeds from our current house; we're actually losing money on our current house).  By any measure the bank wants to use, our salaries alone are easily enough to qualify for the house loan (PITI) with much to spare.

What does the bank want?  "Signed" business and personal tax returns.  Both of these are filed electronically by accountants.  We cannot provide "signed" tax returns.  Shoot, before we used an accountant, I filed our taxes electronically; I haven't actually signed a tax document in at least a decade.  Yet, the returns have to be "signed".  They refuse to accept the 50+ pages of returns I've faxed them. 

I'm at over two INCHES of material I've faxed to the bank.  That is, the pile of papers I've faxed is over two inches thick. 

And, they're still requesting information I've already faxed to them.  So, I simply refaxed it, complete with a receipt showing they'd previously received the documents. 

And this is after they've already approved us for the loan -- we just need to provide this documentation.  But I literally cannot provide some of the documentation, since it doesn't exist (I cannot provide "signed" tax returns). 

I have spent countless hours faxing materials to the bank.  I have so much paperwork that I can no longer organize it -- it's simply grown too big.  Now, it's just a massive pile "organized" by paper clips or larger clips. 

If the banks treat us this badly, what happens to those people who are putting 10% down or 5% down? No wonder the housing market is still bad!

I think the pendulum has swung way too far to the conservative side.

[Nick77]

Same thing here, we worked on a construction loan for almost 4 months. Wouldnt wish it on anybody, although pretty much forgotten as the foundation is taking shape. Hang in there.......

[2wo]

I refinanced my mortgage with my credit union. Not only did the hold the original mortgage but my pay is directly deposited with them. I thought it would be a little easier, but no.

It took 6 months and an unbelievable stack of faxed paper work. Things like proof of employment and pay stubs, Its the company's own credit union, where do they think the deposits have been coming from all these years? Proof of homeowners insurance and tax bills, when they are already sent directly to them.

I just wanted to scream...John

[WGH]

Same here, credit score over 800 and a huge down payment and couldn't get a loan. I got lucky and found a house in a great neighborhood that needed a lot of work. The price was exactly what I saved for a down payment so I paid cash.

I was then able to get an equity loan at a local bank using the house as collateral. The national banks like Wells Fargo where I have had accounts for over 30 years still didn't care and wanted to drag out the process for months but the Bank of Tucson is locally owned and I had my fix up money in 2 weeks.

Go local!

Wayne

[SteveFord]

Wells Fargo is the pits.

[WGH]

Agreed! I use them because they are a few blocks from my business and very convenient but I manage my accounts so I have zero fees.

[NIGHTFALL1970]

I have all my accounts (savings, checking, mortgage etc) with BOA. I refinanced a year ago.  I was not buying a new house, I was not changing accounts or banks or anything.  Just refinancing with the SAME bank.  I had been with them for more than 15 years and had my mortgage for over 4 years. I thought it would be easy.  BOA could not have screwed things up more!  Then once I had them fix something they would screw it up again the next day!  It took months of faxing and phone calls (mostly waiting on hold and taking 1/2 hour to sort through menus!)  The whole process really sucked!  Here we are in the age of computers so you would think it would be easier than ever.

[neekomax]

It's almost as if large corporations are sitting on profits and cash to make their balance sheets look better and drive up the price of their stock.

Hence: No loans, no hiring.

Thanks, corporate overlords! May I take my dogs for a walk now, or would you prefer I stay in and consume some genetically modified corn syrup?

[thunderbrick]

I've been with BOA for 20+ years, including my mortgage.  Credit score in the 800s.  When I wanted to ReFi I called the 800 # and was rudely told to send them a non-refundable check for $400.

I went across the street to a locally-owned bank who did everything possible to help.   They even did the legwork to correct errors in my credit score.  Couldn't have been easier.

[macrojack]

Consumer mortgage guidelines govern what lenders can do and what is required. You may find it advantageous to visit a local bank and explore the commercial loan terms and availability.

I have 4 mortgages open at the moment and that is the limit allowed by those guidelines. Currently I'm dealing with a locally owned institution about a commercial loan. Interest rate is higher. Down payment is larger. Maximum term is only 20 years. And there is a reset of interest rate every 6-12 months after 3 years fixed. Sounds worse, of course, but the upside is dealing with a human and being able to negotiate with someone.

For my purposes, this arrangement is probably going to work fine. Also worth considering is the possibility of establishing a working relationship based on who you are rather than being herded through a system of statistical gates.

[geowak]

I am also looking for a house. My wife and I are very frustrated with the process. In my naive mindset, I thought it would be exciting finding a first home?!? WOW was I ever wrong. The first house we found that we liked after a year of looking had "hidden" mold damage, septic failings, foundation cracks and in the end was turned into "buy as is".

Even our realtor is getting pushy with us. I guess I can understand, he wants to finally get compensation for all his showings..

Don't want to get started with the banks.... I'll be here all day. Keep your chin up ctviggen. Maybe you should find another bank to deal with that understands how taxes are done now...

[neekomax]

Currently I'm dealing with a locally owned institution about a commercial loan. Interest rate is higher. Down payment is larger. Maximum term is only 20 years. And there is a reset of interest rate every 6-12 months after 3 years fixed.

I wonder why this is?

[neekomax]

I am also looking for a house. My wife and I are very frustrated with the process. In my naive mindset, I thought it would be exciting finding a first home?!? WOW was I ever wrong. The first house we found that we liked after a year of looking had "hidden" mold damage, septic failings, foundation cracks and in the end was turned into "buy as is".

Even our realtor is getting pushy with us. I guess I can understand, he wants to finally get compensation for all his showings..

Don't want to get started with the banks.... I'll be here all day. Keep your chin up ctviggen. Maybe you should find another bank to deal with that understands how taxes are done now...

Geowak, take your time, and make sure the home inspector you hire is as good as you can afford. Shoring up a bad foundation would cost a lot more than any engineer's inspection fee.

Don't worry about 'your' realtor, it's the nature of his job to have to be patient. By the way, are you sure about whom he legally represents in your dealings with him? If not, ask, and make sure it's you. Agency disclosure laws vary from state to state, but the bottom line is that you need to be aware of where everyone's fiduciary responsibilities lie in order to be confident in the advice you're getting, and eventually, the decisions you make.

*Source: I'm in the business (NY).

[macrojack]

I wonder why this is?

I wondered too. So I asked. They don't want to be providing an interest rate 10 years from now that costs them money vis a vis the prevailing rate at that time. Could be crap but I believe them. It is their money they are lending.

Rates and other details will no doubt vary from state to state and from one institution to another. In my case, the commercial division looks to be my best option. But I'm not looking to buy a home, just a temporary investment. Others will have to decide for themselves whether they can live with non-standardized provisions.

[Ericus Rex]

B of A is the worst bank out there.  I won't bore you with details but I got out years ago, after 15 years of business.

[neekomax]

I wondered too. So I asked. They don't want to be providing an interest rate 10 years from now that costs them money vis a vis the prevailing rate at that time. Could be crap but I believe them. It is their money they are lending.

Rates and other details will no doubt vary from state to state and from one institution to another. In my case, the commercial division looks to be my best option. But I'm not looking to buy a home, just a temporary investment. Others will have to decide for themselves whether they can live with non-standardized provisions.

Hmmm, interesting. I wonder why a huge commercial bank would be more willing to incur that risk, while the smaller institution is not? Are they dumb?

[rodge827]

I had a conversation with a CFO of a major home improvement chain a while back.
He is very much on top of current lending practices and told me that along with the Government buy out came a Government regulator.
He explained to me that most banks traditionally looked for a loan coefficient of .70. This coefficient was a mathematical calculation based on many factors and not just a loan to value ratio. Well the Govt. regulators are looking for a coefficient of about .90 before they approve loans. Very few if any can qualify, ergo the huge spike in fees.
 
I recently had a conversation with a Hud Housing counselor and she said the large banks are getting out of the home mortgage business, to risky and to over regulated. She also said that your best bet will be the smaller regional banks, local banks, and credit unions for home loans.

A few years back my mother was doing an open house. It was a slow day and a perspective buyer with his wife sparked up a conversation with her. It turns out the guy is a VP of a major NY bank. So mom asked him "Whats up with the lending situation?" The guy reply's " We have plenty of lending capital, we're waiting for the rates to go up, when they get to 8-9% you'll see more lending".

Chris





   

[audiogoober]

CHASE Financial is fantastic. We've had a mortgage with them for 10 years and they've been great. They called us to advise that we could refinance with them and save a bunch of money. All they did was verify my employment info was still current. Then they called to schedule an appointment and came to our house with the papers for my wife and I to sign. This was about 6 months ago. We could pay less monthly, but instead we reduced the length of the loan by over 7 years.

CHASE is the best in my opinion! A++


Hang in there....it's worth it.

[SoCalWJS]

I keep reading that the lending institutions are "easing up" the restritions and making more loans. I think it's easier to get car loans these days, but Home Loans sound like they're tough to get. Glad I'm not in the market.

I'm glad thet're not making the stoooopid NINJA loans anymore, but..........

There needs to be a better compromise.

[SJ David]

We're trying to buy a house.  Our sole debt is a car payment (and our house, which soon will be sold; that is, the closing occurs before we close on the "new" house).  My credit rating is over 800 for all three credit companies.  We're putting 20% down (NOT using proceeds from our current house; we're actually losing money on our current house).  By any measure the bank wants to use, our salaries alone are easily enough to qualify for the house loan (PITI) with much to spare.

What does the bank want?  "Signed" business and personal tax returns.  Both of these are filed electronically by accountants.  We cannot provide "signed" tax returns.  Shoot, before we used an accountant, I filed our taxes electronically; I haven't actually signed a tax document in at least a decade.  Yet, the returns have to be "signed".  They refuse to accept the 50+ pages of returns I've faxed them. 

I'm at over two INCHES of material I've faxed to the bank.  That is, the pile of papers I've faxed is over two inches thick. 

And, they're still requesting information I've already faxed to them.  So, I simply refaxed it, complete with a receipt showing they'd previously received the documents. 

And this is after they've already approved us for the loan -- we just need to provide this documentation.  But I literally cannot provide some of the documentation, since it doesn't exist (I cannot provide "signed" tax returns). 

I have spent countless hours faxing materials to the bank.  I have so much paperwork that I can no longer organize it -- it's simply grown too big.  Now, it's just a massive pile "organized" by paper clips or larger clips. 

If the banks treat us this badly, what happens to those people who are putting 10% down or 5% down? No wonder the housing market is still bad!

I think the pendulum has swung way too far to the conservative side.

Try to find the loan underwriter (back room person, not a person in the branch office or on the phone). It may take some friendly persuasion. Determine what exactly they need. My guess is that a certified copy of the return information from the IRS will do. This is free but takes some time and summarizes the amounts involved in the returns by year. File a form 4506-T, I think it is.

There is money to borrow out there but not much competition to lend so the consumer has to look and work for the deal. Quite unlike the heady days leading up to the 2007-2008 bubble bust.