Recently Closed - FHA Manual Underwriting in Delaware
Winter is widely known as the "slow time" for real estate, but late 2016 and so far 2017 hasn't slowed down one iota for myself and many of my business partners. Based on ActiveRain commentary, winter has been good to many in the real estate industry across the country. Our first deal of 2017 was someone that found me online looking to buy a home in New Castle County, Delaware.
These folks were house hunting and had been told by a couple of lenders that they couldn't be approved for a mortgage. Thankfully, they realized that a 2nd or 3rd opinion would be a good thing (which I agree with - 
if you follow my blog, you know Lenders Deny Approveable Loans all the time!). With good credit, down payment funds available, gainful employment, and straightforward documentation, I determined they would be able to purchase a new home immediately.
The issue with other lenders they spoke with first was that there was a recent bankruptcy/foreclosure due to no fault of our client - they had been sold a "lemon" of a home that had multiple undisclosed problems, and within their first year of ownership, the home became little more than a furnace using money as fuel. Structural issues, tree roots, appliance failures, and more. You name it, things went wrong.
Automated underwriting systems don't look kindly on recent derogatory credit incidents, but automated systems also can't speak with a client and understand the situation completely. That's where FHA manual underwriting comes in. When the automated system says "no", we put a case together for an underwriter and outline why we as a lender should say "yes". With the liability that comes along with FHA defaults under HUD, many lenders stay away from manual underwriting (with manual underwriting, there's no "look, the automated system said it was a good loan!" excuse a lender can use if things go badly with repayment). At Mason McDuffie, we are fortunate enough to have a great team of FHA underwriters in-house that can manually underwrite a file, helping more borrowers get approved when they should be approved.
Everything about this transaction went well. The buyers were represented by an excellent real estate agent, Peggy Centrella with Patterson Schwartz, and that made a huge difference in going from application to closing in just a few short weeks. With the help of Brian Funk of Funk Attorneys, we had a tremendous team of professionals and it showed in how smooth the whole process went. Buying a home can often be stressful, but this one was an example of a buyer having a team of true professionals all working together, and the results were stress free, and most importantly, an on time closing with happy buyers beginning the new year with a new home. Here's what they had to say:
"We had issues with every other lender I tried due to their lack of knowledge of FHA and bankruptcy guidelines. John was very knowledgeable from the very beginning and confident he could help us. He was always accessible, prompt, and reliable! Our process was seamless! We spent the majority of our time just waiting for our closing day! Thank you so much John...it wouldn't have been possible without you 😉"
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