CPR needed on a dying deal!!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Help! Call 911! Well, one of my closings for this week is dying a slow death. I just hate it when that happens. We were supposed to close last Friday, then extended until today, only to find out Wells Fargo has denied the loan due to the Buyer's debt ratio being to high by 1%. Only 1%! Seemingly, there is some additional income, from a part time job, that was disqualified, due to not being seasoned (less than 12 months). How can something so small kill a deal?

Anyway, the Loan Officer called me today, to give me this news, and to request a 3 week extension so they can submit the package to another Lender. A 3 week extension! I'm not quite sure how an extension and a new Lender is going to change the debt ratio. The facts are, these are first time home buyers, that were getting a pretty good rate and a 30 year fixed 100% first mortgage from Wells Fargo. If they switch to another Lender they are looking for an 80/20. Now I have been doing this for a while and may be looking at this wrong, but wouldn't an 80/20 make the ratio even worse than it already is?

My suggestion was to check with the underwriter, at Wells Fargo, to see what the loan amount would need to be to fit within an acceptable ratio. By my thinking, maybe, if we knew this figure, we could adjust the purchase price downward and do the deal, instead of granting an extension on a deal that may or may not work. Does this make sense? Is it a doable solution? Maybe reducing the price by $5,000 or so would work. We could then lower costs to the Seller to get as close to the original NET as possible.

I'm thinking out of the box here to try and get my Sellers out of their house. We have been trying to sell this place since June and they have in fact already placed a sizeable deposit down on a rental home. I don't want them to lose this rental deposit or this deal. I have grown to really like these folks and I want them to be able to move on. At this point I am not even concerned with getting paid. Heck, I made enough money this year. Sometimes you just have to do one for the "ole gipper."

I'm looking for 100% financing on a purchase price of $175,000 with the Seller contributing 5% towards Buyer's closing costs. The Buyer has a middle score of 620.

So, what do you think, ActiveRain mortgage guys and gals? Any hope showing? Any way my Sellers can still salvage Christmas? Are there any mortgage brokers wanting to ride a white horse this Christmas? All thoughts and suggestions are appreciated. Giddy up!!

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Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

OK as of this morning they are still trying to work it out with Wells Fargo. Not sure how but we'll see.

BTW I want everyone to know that my Seller has been reading this post and the comments. It has given him some hope and I think it has helped him to understand what it is mortgage brokers and Realtors go through to get a deal closed. So again I want to thank everyone for their participation in this conversation.

Dec 21, 2006 01:56 AM #90
Rainmaker
671,844
Jim & Maria Hart
Brand Name Real Estate - Charleston, SC
Charleston, SC Real Estate

Bryant,

I want to thank you for the informative post, as well as all the comments. You have truly gone far and beyond the call of duty. Great Job. Thanks again.

Dec 21, 2006 07:12 AM #91
Rainer
67,067
Lauren Corna
Archway Realty, LLC - Southlake, TX
Broker

Unless I'm reading the guidelines wrong...I looked up the information for the Kit and It said in the underwriting guidelines that Interested Parties Contribution is 3% on LTV of 90% greater.       MyCommunityMortgage

Dec 21, 2006 02:09 PM #92
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
Lauren... just an FYI.... it depends on the investor. Each company can be different depending on who they sell it to.,....  Fannie ..freddie....  each agency has their own different variations.  And some lenders even have their own guidelines. Countrywide is big enough and sells a large volume to fannie, they can go and negotiate different terms than say, Wells Fargo...or vice versa.  Depending on who thinks who can gain more of a market share. And it goes on and on... hope this helps a little.
Dec 21, 2006 02:26 PM #93
Rainer
32,037
Ken Stampe
iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX
iBrandPlan

Uh....pssst.....

 Just poking my head in here....anyone home?....anyone know what happened?....Did the deal close?....

Dec 28, 2006 06:27 AM #94
Ambassador
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"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL
Broker Bryant...Helloooo...Ken Stampe wants to talk to you. Any one home. Pssst. :) TLW...ROAR!
Dec 28, 2006 01:44 PM #95
Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Hey Ken, we are currently on life support system but are contacting the families involved about pulling the plug. The funeral arrangements will be made of January 2, 2007:)
Dec 28, 2006 01:58 PM #96
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
lol... that's not funny.,.... but you made it sound funny. What happened to this lender that was brokering it out?  I guess there had to be a lot more to it than just the 1% over the debt - to - income ratio?
Dec 28, 2006 02:00 PM #97
Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
The problem is the payment is coming in $150 higher than the buyer can afford. They have an approval(supposedly) but the buyer has balked at the payment level. So I have suggested a 1% rebate from the selling agent to off set the $150 for 14 months. This would give the buyer time to have their part time job established and give them time to season their credit. The house they are purchasing would have 13% equity in it from the get go. So after 12 months they could either refi or drop PMI to lower the payment. However, the buyer has now reached a critical stage of frustration and may or may not be going through with the deal. So we'll see. The Realtor has not been able to reach them since Friday. She thinks they have gone away for the Holiday. So until she speaks with them we are dead in the water. The seller and I are waiting until Tuesday to pull the plug, if necessary. 
Dec 28, 2006 02:09 PM #98
Ambassador
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"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

"<we are currently on life support system but are contacting the families involved about pulling the plug>"

Hubba! Bubba! I love it when you do that. Wink. Wink. :) TLW...ROAR!

Dec 28, 2006 02:19 PM #99
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
why is the payment coming in at $150 higher. Sorry, just curious and trying to put my creative hat on.... as we talked about in Karen's post.  nite
Dec 28, 2006 02:22 PM #100
Rainer
32,037
Ken Stampe
iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX
iBrandPlan

Jeff....you were done trying to solve this the other day....

BBryant, thanks for the update. Your suggestion makes a tremendous amount of sense to me and from your position as a representative of the buyer you have gone way beyond the requirements to be fair, creative and problem-solving. Too bad the loan officer wasn't half as much in the same vein as you have been.

Ken Stampe

Dec 28, 2006 02:34 PM #101
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
Ken..... huh?  says who? I just walked away with it, because I couldn't give a true opinion based on little facts. I never said I was done done. I just wasn't going to spend more time on it until we were told more.... or to see if it got done.
Dec 28, 2006 02:39 PM #102
Rainer
32,037
Ken Stampe
iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX
iBrandPlan

Jeff....aha....you weren't "done, done". I see. :) I went back and looked at your e-mail from last week:

"I am done with it... for the rest of the night"

I stand corrected, my apologies...

Ken

Dec 28, 2006 03:08 PM #103
Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Hey Ken, I'm on the Seller side not the buyer side.

Ya'll play nice now. The payment came in at close to $1,475 PITI the buyers are only comfortable in the $1,300 range. So there lies the issue.

Dec 28, 2006 11:42 PM #104
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
Hey Bryant... what was their payment originally, before this started?  HAs it increased since then?  I know you have the sellers side, but I am trying to make sense of this. Something still doesn't make sense. And for what it's worth, I know you have relationships with a few loan officers.... but seems to be right up my alley, to be very creative... legally... and getting it done. Some what as you mentioned in Karen Hurst's post, which was a great comment. Some of us just see it as our job to get a deal done.  thanks   And this is the part of the business like I like doing and unfortunately, this is more than half my deals, because I pick these types up from other brokers on the east coast. Meaning.... I network online and in the last year, I have done about 10 deals that other lenders could not do.... just an FYI...
Dec 28, 2006 11:49 PM #105
Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Hey Jeff, I'm not really sure. They were doing a 100% first initailly at 6.78%. This one didn't fly. They were switched over to an 80/20 at a much higher rate. I think blended it went to 8.5% or 9%. I'm not on the buyer side so don't have all the details.
Dec 29, 2006 01:51 AM #106
Rainer
32,037
Ken Stampe
iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX
iBrandPlan
Bryant - I knew that you represented the seller I just typed "buyer". What happened to those psychic abilities you used to have? Don't read what I type, just read what I MEANT to type.
Dec 29, 2006 05:16 AM #107
Rainmaker
1,142,260
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Ken, I'm getting a little slow in my old age. Plus I just had 4 of my grand kids running around destroying my house and mind for 6 days. I'm just happy to be alive:)
Dec 29, 2006 05:52 AM #108
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"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

"I'm just happy to be alive:)"  Me too. I have have yet to regain my strength. SVW...TLW...ROAR!

Dec 29, 2006 05:58 AM #109
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