A few weeks back I wrote about a single woman attempting to buy a house that did not fit her budget in my blog, Is it Mortgage Fraud?. She had been out with an agent in my office and was found by the mortgage representative NOT to be loan worthy. Seems her debt to income ratio was off and the credit report had some damaging information about her bill paying habits.
She was given advice on how to correct her credit score by the mortgage representative and the agent found her a home to rent while she began the repair process. The agent also started feeding the buyers boyfriend with landscaping jobs cutting grass at vacant homes that she had listed for sale. But, when the lady wanted to look at homes again the agent had the mortgage representative check to see if she could in fact buy a home, or, was just being set up for disappointment. You know, it's happened to all of us where we have shown homes that we believe to be in the correct price range of the buyer's purchasing power only to find out that the home they love is not only out of their range, it is not even in their ball park.
The word back from the mortgage representative was clear - she is not ready to buy a home since she has added debt to portfolio by co-signing for a truck that her boyfriend uses in his "new" landscaping business. So, the agent called her client back with the bad news. But, this buyer was determined to buy a house and start living her American Dream. The buyer called another agent and found herself another mortgage representative. Thus, a contract to buy my listing with a pre-approval letter from a reputable mortgage company found its way to my desk.
We negotiated a deal. She wanted the house cheap and she wanted the seller to pay her closing costs. We offered to pay closing costs if she built them into the agreed upon price. Never mind, she suddenly had the money to close if we sold at the cheaper price. How does that happen? Well, the explanation was the buyer is strapped for cash and wanted her money for other expenses. So, we move forward. She has a home inspection, an appraisal and survey is done along with the title work. So, I change the status to "under contract" and insert the sign rider. The young lady even asks the owner to sell some of the furnishings to her. Life is Good! And, then the stuff hit the fan.
Suddenly, the mortgage was on hold while the new mortgage representative tried to "work it out" on the debt to income ratio. Her old agent in my office picks the fax up off of the machine and sees the name on the document and fills me in. I called my point of contact at the company and he spoke with the owner of the mortgage company who called in the representative to discuss this little problem. All my calls to the other agent go unanswered as I try to see if she can get a gift from her parents or if she can put the boyfriend on the loan, etc.
But, then we are doing the walk thru inspection and sitting at the closing table of buyer's attorney along with the seller's attorney and a closing clerk from the mortgage company. What happened? How did we get here? I am left to wonder except there on the HUD-1 is the answer. Not only was the girl able to pay her own closing costs but she put up over twenty grand that no one knew she had. I am not sure if this buyer knew anything about leveraging debt but, I am happy to say "Life is Good".
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