I applied for a HELOC with TD Bank, and after nearly a week of calling & checking on my application (they initially claimed it would take only two days), they finally said my application was denied. "Based on what, exactly?" I asked. They claimed my debt-to-income ratio was a whopping 76%, and that I'd missed a mortgage payment. Well, something didn't sound right (since my credit's great & I haven't missed any payments of anything in a long while). I pulled my 3 credit reports and found that my DTI's actually only 25% (TD said their limit was 36%), and that mortgage payment I missed was a single 30-day past-due back in 2010 (the account's since been closed via a quitclaim after my ex & I divorced).
I'm fuming right now, since I don't see any of the info anywhere they claimed to turn me down. Has anyone else experienced this? Do I have any recourse, or should I just move on to the next bank? (I just don't want this to happen again for some reason.)
@Vonetta Booker By law, they have to provide you a denial letter stating the reason and a copy of your credit report that they used.
Get that and then you can see if they made a mistake and have them fix it. If they refuse to then move on but do file a complaint with CFPB.
Upen Patel, Mortgage Banker
VA, FHA, Investor Loan Specialist
National Lender, Federal NMLS# 1374243
It seems to me like someone at the bank screwed up somehow. They may have your application mixed up with some other borrower's, or even merged with another.
One late payment from 5 years ago is not even a blip if there are no other issues. You could try to escalate the issue within TD Bank. Ask the person who said you were denied to refer you to their supervisor. Ask the supervisor to list all of your accounts that add up to the mysterious DTI.
Thanks for your input, guys. @Upen Patel , they claimed they got it from one of the 3 reporting bureaus, so I went & pulled all three, didn't see any of the info they claimed. So yes, I'm going to go back and speak to a supervisor--but at this point, not sure if I want to work with them if they're screwing up this early in the game, lol.
The DTI ratio should be pretty easy to figure out and clear up if they made a mistake. When you talk to them again, ask them exactly how they came up with that ratio for you. In other words, SPECIFICALLY what debts and amounts they are using in their calculations. Should be pretty easy to figure it out after that.
I've had lenders make mistakes before in calculating my DTI and include things that shouldn't have been included. All it took was me pointing it out to them for them to correct it and re-calculate it.
I called back and asked them exactly how they're factoring the DTI. According to them,they're factoring the monthly payments of the entire HELOC amount, which is what makes the percentage sky high. This is my first time applying for a HELOC, so is this a normal way for them to calculate the DTI?