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Uh.. you're looking for an answer to the question, "Why is it so hard to buy a house?" right? Part of the answer is that the ability (or inability) to sell MBS on the secondary market directly impacts these so-called "no-logic" underwriting policies that you're referring to. I suppose you're technically right, it is the lender's problem. However, like any other cost of doing business, that "problem" is generally passed down the food chain, and in this case is ultimately reflected in tougher UW standards.

And I would imagine the secondary market for those ABS is better than for MBS specifically. Of course, this is just speculation. I don't actually know the state of either market.

Thanks!

*calls broker* I just threw up in my mouth a little.

Anyone? Did I leave any information out necessary to make a judgment? I'd like to lock today if and only if this looks reasonable. Thanks again!

I'm going USDA here in Phoenix, and my broker told me today that turn around time from the lender's UW to USDA and back was five business days. Truly YMMV i guess. I figured it would be swamped here w/ the tax credit expiring.

Scores: mid 755 (EX) Purchase Price: $181,500 $0 Down Interest rate 5.25% USDA outside Phoenix Metro, AZ Origination: 1% ($1815) Discount Points: 0 Appraisal: $350 Processing Fee: $445 Underwriting Fee: $595 Credit Report Fee: $20 Wire Transfer: $25 Prepaid Interest: $400.84 USDA Funding fee: 2% ($3630) $5000 seller contribution, any remaining closing costs rolled into loan, $0 at table for closing. Thanks in advance!

I just closed on my loan. I am self employed and knew I would be purchasing inside of 2 years. I took NO DEDUCTIONS the last 2 years. Sure... it was costly, but I knew I wouldn't qualify unless I had the correct income. I will soon be going to my accountant to amend my prior returns and claim my deductions. Changing your deductions moving forward is one thing, but amending prior returns is something else entirely. I hope this was a joke.

Yeah, I love those shows. Especially when the agent/host watches the buyers sign a purchase agreement and proclaims, "CONGRATS, you just bought your new home!" Hardly! That's just the beginning of the end.

What kind of down payment will you have?

Sounds like the hell we had been going through. We waited on a short sale (almost exact same situation, bank with thumb firmly planted...) for four months and walked away for a new build. The resale market here is absolutely ridiculous right now. You could always leave your offer in play and continue looking. The bank isn't going to approve your contract as is. They will counter. We had multiple offers out on multiple short sales at one point. At some point, you just have to give up. For us, that point was about four months.

Everything I've read validates what you're saying, except that you need to be unable to obtain conventional financing (not including FHA or VA). Even with my current reserve situation ($15k-$20k) and good credit I would not qualify for conventional financing on a $180k loan, I would either not be able to come up with 10% down or because the 10% down payment would leave me with insufficient reserves. I know there are some 5% down conventional programs out there, but I believe most if not all require a 780 mid or higher? My mid is 740ish. As long as the requirement is that you are unable to obtain conventional financing, I think I'll be fine.

I find it hard to believe that they would turn everyone down that has the ability to pay a 3.5% down payment (thus forcing all of them to go the FHA route), and I do have what I feel are some legitimate reasons to keep myself liquid right now (expected increase in ongoing medical expenses). I'll need that money, and to have to dump 3.5% into the house when not having to do so would mean keeping ~$6.5k in cash, and the cost of the USDA 102% LTV loan vs. FHA w/ 3.5% down is within $10/month, it's a better financial decision for me. If I could qualify for a conventional loan and was able to put 10-20% down + reserves, etc, that's a different story, but a 3.5% equity position in this market is nothing and I'd rather keep the cash and go USDA if possible. I will talk with the USDA office manager for this market and hash it all out, that's a great suggestion, thanks for that. Any other input from the loan guys is most appreciated, thanks!.

Google really is your friend. http://www.rurdev.usda.gov/CA/pdf%20files%...NG%20GUIDEL.pdf I don't know where my real estate agent got the nonsense about too much reserves for closing, and it doesn't really do much to reinforce my faith in her. From the looks of the above, while my income is right at the upper level I should still qualify, especially w/ my credit (720+ across all three), low DTI and cash reserves. If someone could confirm that the above UW guidelines provided by the USDA are accurate, I would appreciate it. Are there any other lender-related gotchas with USDA? They offer streamline guidelines for scores over 660, do they really not have an automated UW process? Can I really not get an initial automatic UW approval for this kind of loan? Thanks again everyone...

It is an FHA loan. It turns out that this is a $400 appraisal fee. Then that's perfectly normal. I would most certainly get the inspection prior to having the appraisal done.