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Personal Finances / Buying or Selling a Home


Subject:  Re: Mortgage Date:  9/30/2019  11:18 AM
Author:  Rayvt Number:  129266 of 129288

I recall you are a serial refinancer. Was your most recent finance sometime this year, so that they already had your most recent tax returns on file?

No. My last refi was several years ago. It was only just recently that I could get a new interest rate low enough to meet my threshold criteria. Triggered by this post by inparadise

If not, are you sure you got a loan that was backed by Fannie Mae or Freddie Mac? Because Fannie/Freddie loans require solid verification of income, which generally means tax returns.

It was Amerisave. And in fact my previous loan was thru AIMloan. I'm pretty sure it was a FNMA loan, because it's already been sold to Flagstar. Perhaps the solid income verification was satisfied by just the 1099 forms. Of course they still have the form that authorizes the IRS to give them my tax return. But I understand that they only use that for legal reasons if the loan goes bad and they suspect fraud.

Lenders are always trying to figure out how to meet the investor rules with less processing. And investors do seem to change their rules rather often. But underwriters at the same lender are generally held to a pretty standard set of verification rules.

When I was looking via google, I came across references to "Desktop Underwriter". " automated program used by loan originators to qualify a borrower through Fannie Mae guidelines for a conventional loan." Evidently the DTI guidelines are looser for a DU loan than a "manual underwrites" loan.
All this is pretty opaque to me.

Presumably, you will continue to take enough out of your retirement accounts to actually make the mortgage payments,

Presumably, you will continue to make the payments. Where the money comes from is none of their concern. They just want to be able to document that you have enough income.
When I complained about this and said that I could simply discontinue the IRA withdrawals after the loan closed, she said that yes, and somebody who had paycheck income could lose their job the day after the loan closed. But they know that they cannot predict or force the future, they can only go by what conditions exist today.

My payment went down, and you'd think that they would see that as presumptive evidence of low risk, but evidently they don't much care about that. Just that the other ratios meet their guidelines.

Funny thing:
They pulled my credit report 3 times in the first few days. Once for the pre-approval and then a couple of days later and then the day after that. (One of my creditcard is linked to "creditwise" so I get an email every time it gets pulled.)
Then a few days later, they (the loan officer) wanted me to give them an explanation letter for why I got so many credit report inquiries. Me: "??? Those were *your* inquiries!"
Here's the bureaucrat part: "Yes, I know, but we still need an explanation letter from you."
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