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Underwriting an FHA loan with Chapter 13?
My husband and I have been approved on a fha loan to refinance our house and pay off a chapter 13 that we only owe three months on. The court signed off on this. We have been at it since November 8, 2007 and today is December 21 and they are telling us that it is still being underwritten and the only way they can communicate is through e-mail. The mortgage company assured us we would be closed by now. They cannot give us anything concrete when we speak with them. Our credit score is low but we have made all our chapter 13 payments every month and we had our house appraised over a month ago. plus my husband is self employed and we have supplied them with everything they have asked for.Is it normal for them to be taking so long??
There could be a million reasons why it is taking so long, anything from the company only has one FHA underwriter and 6,000 files in line, to…appraisal issue they are trying to cure behind the scenes, to…an employer they have not been able to contact for verification, to they lost the file, to….
They can only communicate by email suggests that you are dealing with a local office with centralized underwriting in another state. Tell your contact person you would like to speak with his/her supervisor and VERY calmly request he/she pick up the phone for a current status.
Note:
FHA doesn’t see the file until after the loan is closed and they receive a copy & request for insurance, so there will never be an “Approval” letter from FHA.
It will never take 3-6 months to underwrite a file; FHA or otherwise.
You can obtain FHA financing with 12 months self-employment if you have at least 12 months recent experience or background doing what you do. Otherwise, only 2yrs income average of self employment.
You can obtain FHA financing after 12 months of on time payments & at least 75% completion of the bankruptcy
FHA doesn’t ‘guarantee' loans, they insure them from an insurance pool.
FHA will allow 2x30 lates in the last 12 months as long as you are current at the time of closing. (Individual lenders may have tighter restriction)
How one can conclude you are being scammed is beyond logic since very few of the transaction details are known.
I have seen this happen many times and then it doesnt happen, get the drift you are being strung along by the broker, what have you seen in writing from fha that you are approved, if the broker is telling you and you have nothing in writing than you have just that nothing. On the other hand if you have it in writing from the FHA Administration than yes it can take 3-6 months, and with the state of turmoil in the mortgage industry it would not be out of reason. How long has hubby been self employed, less than 3 years you are in big trouble, how long in chapter 13 less than 2 years you are in trouble again. the broker should have a contact as fha guarantees the loan, but the loan has to go through a local bank or lender so there should be a live person he can get info from, telling you that communication is through e mail only raises my red flags. what does the lender say. just for giggles how many points and fees are you paying and what did you pay for up front besides the appraisal. if any of this fits or you see your reflection in this mirror, i would seriously start having concerns, like what is my debt ratio if its over 40% its not happening, how long have you owned the house, how much equity do you have, and what did the house appraise for. Hmmmm is it time to go to the local bank instead of the mortgage company, i for one did not know you could do a refi through fha if you were in chapter 13, not saying i am an expert of fha, and the rules do change, but i have done my share of fha loans, and fha streamline refis, oh by the way have you been more than 1x30 late on the mortgage payment in the last 24-36 months, if you have this transaction is not happening, fha guidelines. hope i have been able to help you see the light, if you do run dont walk away from the light, the broker is scamming you.