77 days later and buyer's were just denied financing

7 Replies

Some of you may have read my posts here

https://www.biggerpockets.com/forums/311/topics/35...

and

https://www.biggerpockets.com/forums/311/topics/36...

Thought I'd let you all know that today, 77 days past the day we signed a contract with the buyer's, underwriting came back and said the buyer's were denied financing.  They claim that the male buyer hasn't been at his job long enough and he isn't a stable buyer.  The man has been at his job 8 months and in the same industry for a long time.  His previous company closed down and he even went and took a picture of the outside of the building to prove it was closed!  Underwriting kept telling the loan officer if they did x, y, and z we would get a clear to close and even a few days ago said it would be coming any day now.  Then today, denied.  

Thoughts?  Solutions?  

Many lenders will not lend to you if you havnt been at the same job for 2 years.

Part of the roll of your agent is to screen the offers. What makes up the strongest offer often is the highest offer, but the ability to close.  A preapproval letter from a strong lender with a reputation for closing deals is one of the most important aspects to an offer package.

My agent did an excellent job of screening them and always has a conversation with every loan officer before accepting a contract.  The buyer's had a preapproval letter with excellent credit.  

@Sarah Pratt

Do not know to much about the deal so cannot comment on it specifically but is this not the time to get real creative! How many more months do you have to buy till he can qualify that would give me an idea of what I need to do to keep deal in place, knowing the timing will help your strategy? Good luck!

Hmm; sounds like Offer, Acceptance, EMD, reliance upon good evidence of the PAL - - time to push the lender with legal notice of damages caused by the PAL.

Generally lenders like to see the same field for 2 years. You can change to another company if you are moving up or making at least the same.

Now if it's a different field all together then you may have been a rock star at what you did before but flounder with the new profession which is why lenders want a seasoning period.

In your contract of the purchase and sale is there language related to the buyer will have to apply for an accept a loan with an interest rate of no higher than XX??

This way if they applied for 4% rate but because of little blips another lender will fund at 4.5% the buyer will still be required to go through with the loan etc. If there is nothing in the purchase and sale then if buyer does not get the ultra premium loan rate they can just say financing fell through etc.

The lower the ltv and the more the interest rate the lenders tend to make more exceptions to close a loan.

No legal advice given.  

This post has been removed.

Yeah you guys confirming my thoughts....that the LO is a slight step above a complete fraud and the 3rd party underwriting company deliberately sabotaged this loan just because they decided they didn't want to lend on a mobile home to a Hispanic buyer...and they decided this at the last minute after ever conceivable hoop was jumped thru with flying colors. 

I feel really bad for the buyers and I think they, and maybe us, have grounds for legal action. 

The only good news is that we are all in cooperation with each other to get this deal done because they really want our house and we really want to sell it to them.  Therefore, we think we have all found a local lender that has in-house underwriting that can help us maybe close this deal in another 3 weeks.  The first mortgage company knows that they are in hot water and screwed up so badly that they released the file to the buyer's so that maybe this new lender can use everything in it, even the appraisal. 

Here's to hoping.  Still welcoming all thoughts and advice though.  This has been so heartbreaking for all of us, especially after all of the delays and promises. 

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