Struggles as of august 11th; almost one month after offer acceptance....
Short story -
While we submitted all loan approval paperwork with several lenders but we found the holes in the *promised* mortgage before we signed any official mortgage applications.
Here is the long story…
Going in to this we wanted a conventional loan. Apparently for a two unit you have to put 20% down not the 10% we were originally told. This property would not qualify for a regular FHA loan especially because there is no “real” seller to do the repairs. Looking into FHA rehab loans {HUD 203(k)} we were told they cannot be used for any property larger than a single family. We learned from the description on the property listing that the home was qualified for a “Home Path” loan. So we pursued this. After days of various banks telling us they had a mortgage that the building would qualify for, only to learn they were mistaken, we learned that only two banks in the country do Home Path Renovation loans.
Time line:
(7/13/09)
Got my information to National City for pre-approval and to start the application process.
(7/23/09)
National City told us they could do the Home Path Renovation mortgage or a conventional at 10% down perhaps not realizing this was a two unit building. They were to send the application to me once I decided which loan to go with. I told them conventional or Home Path whichever rate was lower.
(7/27/09)
We suspected National City was not able to do the loan because their lack of timeliness in getting back to us. We were told that A. Lambert Matias, (Senior Loan Officer, Schneider & Associates, PHH Home Loans) would be able to do the Home Path Renovation loan based on a conversation between him and our realtor. PHH Home Loans was also the paperwork (flyer) included with the contract addendum.
(7/28/09)
As suspected National City found out that they could not do Home Path Renovation they can only do Home Path. Also they would now require 20% down for a conventional because they didn’t realize property is 2 units.
(7/29/09)
We were referred by National City to a broker who we were told could do the loan through Flagstar. Flagstar is one of the two banks that can originate the Home Path Renovation of loan. He had all of our information but it was again a total dead end because, as a broker, he did not have access to the Home Path Renovation loan. He was able to locate a MI company that would do a conventional loan with 10% but we again would run into issues of the conventional mortgage inspection and no seller to pay for the needed fixes. With some further investigation we learned that Lambert Matias of PHH Home Loans would also not be able to do the Home Path Renovation loan.
(7/28/09)
Our guy at National City learned there are only two banks in the country that are approved to provide Home Path Renovation mortgages. Flagstar and Colonial National Mortgage.
Once we found out there are only two lenders that could do this style loan we contacted and begin working with Denise. We submitted to her all of our paperwork for the application. Again asking about our conventional loan options Denise told us this was a Fannie Mae owned property and could not qualify for a conventional loan because it would not pass conventional inspection. There is no seller to pay anything.
(8/01/09)
We have been also working with general contractors to get a starting bid on the work needed to the property. One of the aspects of the Home Path Renovation loan is that the application must contain a contractor’s bid for repairs before they order their mortgage inspector to investigate the property. August 1st we had a contractor come out and make an estimate.
(8/03/09)
Got the estimate to Denise. The contractor did not pass a credit check. Had to get another estimate with a different contractor.
(8/4/09)
Received the entire filled out mortgage application paperwork from Denise Tuesday. Signed all and mailed it back to her first thing Wednesday.
(8/6/09)
Met our second contractor to get an estimate. Pre-approved his credit with Denise. We were waiting on his brick guys estimate to submit to Denise so she could order the inspector.
(8/10/09)
We received yesterday evening and forwarded it to Denise first thing this morning.
Today (8/11/09):
Denise ordered the banks inspector to the property.
Read: Run away, run far far away!!!!
