Financing Fall Through??

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  • #70327
    padgeta2
    Participant

    One of the perks of using NACA is that the financing is as strong as a cash offer. However, after being under contract for a home (and being approved), I’m now being told it is not within my DTI ratio. I’ve been under contract since 6/4. 🙁 What do I tell the sellers?? Since BOA isn’t approving the loan, I’ll lose the $2,000 in earnest money, correct? I’M DEVASTATED. I thought this was one of the positives for NACA vs. other lenders. I am already using $20,000 to buy down my points, plus $9,000 from the sellers. I don’t have anything else. It was fine until a few days ago.


    @ttrumble
    , can you please help me figure something out??

    #70330
    Nelsont
    Member

    Do you have a clear idea why you are getting a DTI problem now? It seems to me a mistake or a change of circumstance would be the only things that get a DTI denial this late in the process.

    If your EMD is 1% then $20000 wouldn’t buy down 10 points. It would buy down 5 points with $10000 going to principle reduction. To me, if you needed to buy down 10 points with that 20000 in order to make the house affordable then that is likely where problem is because as of this year the FHFA caps interest buy down to 5 points from borrowers funds and 10 from sellers. But if that is what’s going on your MC shouldn’t have let you sign the bank app.

    #70331
    padgeta2
    Participant

    I don’t have a clear idea. I was approved June 1 and went under contract June 4. I work for a school district, so I’m under a yearly contract, so my finances haven’t changed at all. I am getting a pay increase next year, starting August 15. They asked to see it on the contract or a letter, both of which I’ve given them. I wasn’t told anything about not being able to buy down more than 5 points. I asked specifically and my MC and office director both reassured me I could buy down as much as I needed. The five points would DEFINITELY be an issue at this point, but I am supposed to close FRIDAY and I am hearing nothing from anyone!!!!

    #70348
    TTrumble
    Member

    Hello padgeta2,

    Let’s establish a couple of points before we get too deep with this. There is only one possible way this could have happened. The bank is seeing some sort of debt or other change that we weren’t made aware of, or that the bank would not overlook because of its extenuating circumstances. Were that not the case and there were a DTI problem, the NACA-Lynx system would have stopped you from being able to submit the bank app.

    Was there some sort of new debt, old debt that is still active? The bottom line is that BOA is seeing something that we weren’t aware of. It’s the only way a DTI denial from the bank could have happened. You would have never gotten to the bank app if the info BOA found had matched up with what we had.

    You should NOT lose your earnest money. Your purchase and sale agreement should have a clause in it stating you get the money back if you are denied the loan.

    You need to find out WHY this happened. That’s the first thing you need to know, especially if you are going to try and save the purchase. BOA would have given the reason for the decline beyond just saying it was your DTI. Get with your counselor and find out exactly what happened.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    #70350
    padgeta2
    Participant

    I have almost zero debt (YAY!!!). I believe the issue is that NACA underwriting went based on my pay increase set for August 15 per my contract. I received a promotion at my work and thus a new contract. Because of that, I received a pay increase that goes into effect August 15 (and since I wouldn’t have a mortgage payment due until September, it made complete sense). However, for some reason NACA and BOA are now saying that isn’t acceptable. I have the signed letter from my CFO and it was used to calculate my approval amount at the beginning of June. I’m glad I’ll get the earnest money back! I hate that I have now caused two families to have to walk away from their deals as well. The sellers were set to close on their new home July 16 and same with the family they were purchasing from. I’m just so frustrated and devastated it go to the week of closing before I’m finding out my financing is the issue.

    #70351
    padgeta2
    Participant

    And on top of this, I literally haven’t heard from HAND in three weeks. I think that’s equally as (if not more) frustrating. I never knew what was needed to be HAND cleared or if I had submitted the correct documents. The sellers got very frustrated with some of the documentation needed, and I kept asking them to redo things because I was worried it wouldn’t be accepted by HAND. I live in a pretty small area and most of the agents know each other. NACA didn’t have the best reputation, but I was determined that everyone would walk away and say “that wasn’t so bad, I would definitely accept offers from NACA again”, but I’m worried I have also failed on that side. I’m still hoping and praying for a miracle! HAND especially!

    #70766
    jenmolette123
    Participant

    I’m going through something similar. First no one would accept my offers due to NACA reputation. Finally I found the house of my dreams and they accepted my offer because they worked with NACA previously

    I did the inspection and paid EMD and now when trying to submit for credit access there was a debt missed during my intake. So now my mortgage payments don’t qualify! I have to do a higher buy down which will result in 15000 dollars I don’t have

    The whole reason why I went with Naca and not conventional loan was because it was suppose to be cheaper and for low to moderate income families. There no way I can come up with 15,000 dollars, if this deal doesn’t go through not only is my family affected but so is the sellers!

    I’m so disheartened I’ve been crying all night!!!

    #70912
    trisha48228
    Participant

    whats DTI?

    #70913
    Martin
    Participant

    Debt-to-income ratio i believe

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