I contacted this above company for a mortgage loan since they had already run credit reports of those involved when we were going to purchase a home from a manufactured home retailer, as we had checked with several mfg home companies and the credit reports were run by several more loan companies and caused credit scores to drop.
When we first contacted him about a loan and what our interest rate would be we were quoted 6.5% and got e-mail confirmation. Within 3 weeks we found our home and contacted him again the interest rate went up to 7.25% and this is what it stayed at til closing. The real estate agent handling this home stated that they were never involved in such detail with selling a home, also that the interest rate charged was between buyer and loan people involved.
We signed our initial contract to purchase in October this year and the loan was supposed to close in November this year. Since we had to go FHA due to lack of funds to put down on home, we had to tell the real estate agent that we needed to raise the asking price of the home as the seller agreed to participate in the buyer assistance program (per Loan Officer). My son also had to be put on the loan with us in order for us to qualify for the home and my son was a first time home buyer, so he qualified for down payment assistance.
We currently owned a home in another state and it is under contract with a lease to purchase agreement and loan paperwork is due to be done by Fall of 2008 for purchase. Due to the underwriting dept. at this institution the closing date was delayed because they wanted letters from us which included: a) They wanted to know what my injuries were that made me become disabled, what my son's injuries were that made him disabled since he was on the loan too. I had to fax over my MRI reports from a worker's comp claim which stated all my injuries.
We had to give reason why we moved from another state to here. I wrote that it was for medical reasons and the weather here is more milder than the other state and helps my body feel a little better and the winters here are not as cold and long as other state's are. This was not good enough for them, the loan officer called me and said that they wanted me to write that we moved here to be with our son because he is also disabled and asked what his disability was so he could type it up on paper while I was on the phone with him.
My son has been living in this area for two years now and we came to visit last year and found the weather helped our bodies. I do not see what our disabilities have to do with the loan and I believe they violated HIPA laws by requesting medical reports from me and my son's medical condition. I also had to rewrite letters of explanation because they wanted more details in them.
They also wanted to know where deposits of a certain amounts had come from, which I understand they had to know where the monies came from. Two (2) came from tenants in another state as part of their deposit on home. Two (2) came back from manufactured home retailers but it was the same monies; we just got it back and tried another place, so the money kept getting refunded til we found the home we finally purchased. Not only does it show on bank statements where funds come from, ie; cash deposits or checks or electronic transfers, the underwriter had to call and verify each deposit over a certain amount with the company that refunded us our earnest monies.
I had sent them all the documentation needed on where the money had come from, letters of explanation, check stub from company that refunded the money and electronic transfer from another company. Of course, I also submitted the lease with option to purchase agreement from tenants and the loan officer was requesting deposit receipts from the bank which would show no more than a cash deposit and the amount. The same info was on the bank statements.
It seems like there was one delay after another....something was always coming up or being requested.
The loan did not close until the beginning of December this year and checks to all parties receiving money was not dispursed until several days after the closing papers were signed. We discovered at closing that we were being charged an improvement tax, which the title company closer told us this tax is for homes that are under construction or being built and that we should not have to pay this. Loan officer stated this was a cushion just in case our property tax went up and will go into escrow account.
Our mortgage insurance was based off of the replacement cost the appraiser said it would cost to replace this home, which brought it up a few more dollars and on top of that we have to pay the standard mortgage insurance on the loan, every little bit adds up fast, without the above figures being added in the P & I was in the four to five hundred dollar range. The loan was already sold off before we even signed the closing papers.
As if having to pay moving costs and replenishing household items as well as food and having to pay utility deposits was not enough to deal with, we found out the first mortgage payment is due the beginning of 2008. This gave us no time to save a penny between the moving costs and the above forementioned items. When I asked the loan officer he told me if I could come up with around four hundred dollars for interest they could change the closing papers, delay the closing and make the first payment due in February. Rather than have to delay the closing, because the seller was getting distraught with all the delays and we had moved in on the original closing date, we went ahead and closed.
If you have ever moved you know you need to reserve a moving truck at least two weeks in advance and we always had to call the loan officer and ask if it was closing that day or not. The moving company was going to charge me a cancellation fee if they did not receive more than 24 hour notice. I could not afford to keep paying for cancellation fees, so I called the realtor and spoke with her about this and in turn she spoke to the owner and we got early possession and moved in before it actually closed. Of course, we all had to sign addendums for this, not only once or twice but three or more times as each addendum only covered one week. None of us were aware that it would be delayed this long.
Every time the loan officer called me for a document, I had to dig through boxes that were not unpacked yet, hoping to find what was requested.
We also discovered that the title company and real estate agent involved received all of our documents including letters of explanation and disclosure of disabilites. Every time it got delayed the real estate agent would ask if i talked to the loan officer because he was not returning calls.
This has been very stressful and the worst loan experience I have ever dealt with and will pray I have to never go through this again.
Please advise me on this if you can. Is this normal procedure for a FHA loan? I do realize that with all the foreclosures going on that getting approved for a loan may be difficult, but this went beyond the ordinary regime. The one that bothered me the most was disclosure of medical records and disabilites, which is protected under HIPA laws and we did not sign any paperwork for them to get these items, so they asked me to e-mail or fax the requested items to them.