Many areas of this great county of ours are facing serious employment issues. Here in Connecticut the Insurance Capital of the world, we have been particularly hard hit. Insurance Companies have suffered many losses, and as a result, have had to down size and let many people go.
Because of the many job loses, several of the Lenders/Banks have add one more condition to their Commitment Letters, condition #3 of the Commitment Letter below:
Employment Verification has always been part of the Loan Approval Process, but I have never seen Employment Verifications done a second time until recently. Most people might think that this condition might not apply very often, but in reality we are finding that a number of Borrowers have lost their jobs between the time they meet with the Loan Officer and the Loan Closes.
I had a young couple just a couple of weeks ago the met with me on a Thursday night to do a Loan. Everything looked great until the next morning when I got a call from the female borrower that she had been notified that morning that she was being laid-off. She had just been hired two weeks before and was not concerned about finding another job, because she had, had several job offers before accepting her present position, but this was a big problem in approving the loan.
Luckily for them just about all of their debt, except for one small car payment was on her, so losing her income did not affect the Debt to Income Ratios much once I removed her from the loan, and proceeded with just him as the Borrower. But in most cases this would have been a major problem.
I advice every Borrower of this condition at the time we meet to do the loan so that they will do what this young couple did, notify me right away once they have any hint of possibly losing their jobs. But this is also something that especially Realtors need to know will be checked before loans close these days with many Lenders. Let's just hope that it does not happen to any of our Buyers/Borrowers.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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