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cinderella

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About cinderella

  • Birthday 01/01/1907

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  1. When did title become the authority on servicing? I think title is just making stuff up as they talk to get off the phone.
  2. Generally if large deposits show up and can't be documented by an LOE, the UW can just eliminate that amount from the balance on the statement - i.e it can't be used for a down payment or reserves. That is not a hard and fast rule, it is up to the UW discretion and the risk threshold of the lender. I like blackjack myself.
  3. What do you mean by "incorporate?" If this is an S Corp shouldn't too much of a problem. If you mean an C corp, yeah, there will be issues.
  4. How does he win $35k-50k a year and break even? Does he win $35k to $50k and year and also lose $35k to $50k a year? Someone hobby gambling isn't really anyones business in undewriting unless they try to claim income to qualify or large deposits start showing up on the bank stmnts or at the underwriters discretions they inquire about a large number of ongoing re-occuring large withdrawals. Large deposits need to be documented, if he has large deposits from gambing, he will have to provide satisfactory documentation (not just a letter of explanation) verifying the source. If that can't be done, the deposit should be subtracted from the balance of the account or will not considered if it was used for the down payment. Curious - What does he like to gamble on - Poker? Horses? Blackjack?
  5. The IRS back taxes is delinquent federal debt. Doesn't matter if you have been making timely payments for 2 years, it is still delinquent federal debt. Student loans are not delinquent federal debt with payments arrangements, but taxes are in this category. This would be an automatic downgrade to a manual underwrite for FHA, which is a little more tricky to qualify for than an aus approval. It is not the automatice AUS approval. of course that is if you go on the loan. UT is not community property like you say, your wife may or may not qualify like Brian says, who knows what the eight ball of DU will spit out; FHA can approve to 57% DTI with the right scenarios. I highly recommend her assets be disclosed on the application to ensure the du counts them. I wouldn't buy a home with the though prices are not coming down unless you really do have a crystal ball in front of you; that should't be a motivation to buy. I think its a good loan; your wife is a saver has saved $25K says something about her ability to manage finances and whether or not you go on the loan, the fact that you have made timely payments to the IRS for 2 years is pretty good, I saw a credit report a few days ago with over 20 state/federal liens, some open applying for refinance. I can't really say seeing liens, open unsatisfied lines on credit reports is a rarity, and it does say something about a borrowers ability to manage their finances when they let them go just as much as it says about a borrower that doesn't let them go and enters into a pymnt plan with the IRS and doesn't let it go to lien. Oddly enough, I see a 2 year payment plan followed with the IRS as a good thing that the brwr did not let go to a lien. Keep in mind, every lender is different, doesnt matter what a guidelines, any lender can impose stricter guidelines/overlays than FHA or any investor, and a credit union is likely to be that lender. Not necessarily that you will be declined by a credit union or lender, but they do tend to be most conservative in lending.
  6. Hi Breezy!! Thank you for the shout out. I hope you are doing well! I turned into an irreperable insomniac late last year. My DH had serious heart condition and I resigned from work and spend every moment i could with him. We had to wait for a battery of tests and findin the right cardiac surgeron to do risky surgery. I don't think I slept but two hours day and spent my night checking on my sleeping DH 100 times a night to make sure he was ok, he was at risk for sudden cardiac arrest. He had a very successful surgery several months ago and excellent recovery. I haven't gotten over my paranoia to check on when he goes to sleep still so while I've returned to working, only remote so I can keep an eye on DH, i haven't stopped watching him throughout the night
  7. cinderella, would you mind expanding some more on this? Are you saying that the auditing activity is picking up in this regard? It is quite interesting that this particular thread has been resurrected after all this time. Reading back through the old comments surely shows a lot of people came up with all sorts of reasons why it couldn't have been a bubble back then (my area is fine, all RE is local, not all sales are on MLS, and so on). Hi....Yes, auditors to review files of closed loans is in demand and has gained steamed. Loan goes to foreclosure, that investor, and often US taxpayer is going to be stuck with the bill. Those investors, Fannie, Freddie, FHA, and VA are going to 100% audit that file to see if there was something the originator missed to make them accountable for the losses. Mortgage insurance companies that offer PMI like Radian and MGIC are going to have that file audited 1000% to see if there was something missed and they can push the loss back to the originator. It is standard. In market that keeps rising, foreclosures are uncommon and auditing is often done to meet some type of compliance, maybe 10% of loans at random. When the bubble burst around 2007/2008, there wasn't a large scale audit done in anticpation of the bubble to limit losses, it was dones after the fact, when Radian is looking at losses in the billions for foreclosed homes. Nobody was prepared for that. Now, before the originator sells their loan to another banks portfolio, those lenders buying the loan are auditing a lot more upfront so they won't get stuck with a bad loan. Instead of waiting for a loan to go to foreclosure, maybe a late payment triggers an audit to catch a defective loan to seek reimbursment from the originator (or servicer that bought the loan servicing rights) should this loan go into foreclosure in this now riskier market Riskier market being increasing rates, for those that use their homes as ATM's, charge up more debts, and come back to refinance over and over again, they can easily find themselves trapped. I see this everyday, everyday. Once interest rates increase, it is much harder if not impossible to make the DTI ratios with increasing payments from increased interest rates, hence the looming foreclosure and nervousness to audit files that would not be audited in a boom, such as one missed mortgage payment. Supply and demand could be argued left and right and there is truth to it. IMHO, purchases loans should be fine. But these refinances that go on and on and on and on; the brwrs are able to put the consequence of mismanaging debts from the last refinance by doing a new refinance to pay off all the debts accrued since the last refinance because low interest rates and lower interest made it possible. Now, much harder if not impossible for some to refinance because interest rates have increased and they can't make the higher payment with the higher interest rate. FHA goes to 57% and VA higher - they were already at the limits of DTI in the high 40's to 60's DTI on the last refi at 3.25%; they can't possibly do another refinance to payoff all their debts they can't afford to now pay with a 4.50% interest that will increase their DTI to not qualifiying.
  8. If you are not claiming the income on your tax returns, you will not qualify for FHA or conventional. Does not matter what your savings and down payment are, if a history of income is not claimed, as far as the docs are concerned, and tax returns and transcripts are required for self employed, you will not be approved. Expect a 2 yr avg of self employment on an increasing trend in self employment income. You may qualify for non prime loans- every non prime lender has different criteria. One known prime lender wants nothing to do with tax returns; they will use a 24 month history of bnk stmnt deposits to calculate estimated self employment income, but of course this is higher interest rate and at 20 - 25 % down.
  9. Welcome Really, extenuating circumstance are rarely rarely approved the documentation has to be clear, concise and reasonable the stated extenuating circumstance led to the f/c. I've known an underwriter fired after approved a f/c due to extenuating circumstance - did not document the circumstance satisfactorily, went to audit with FNMA and was sent to repurchase to the lender due to failure to substantiate the extenuating circumstance. They tried to rebut, but did not prevail. The extenuating circumstance was not really documented, and it shouldn't have gone thru by the guidelines. I think I've approved two extenuating circumstances to bypass the waiting periods, that is out hundeds.
  10. The other home with foreclosure is not relevant. The application 1003 asks if there has been one in the last seven years - no is the correct answer for the 1003. The foreclosure may show on any number of fraud tools - fraud guard - LEXIS NEXIS, but it is meaningless - it is beyond 7 yrs. I don't think Fraud Guard tracks judgments or not very well. The one that is nearly guaranteed to pick up judgments is LEXIS NEXIS. Very very very very very few lenders use this, and it is surprising how many judgments it turned up not reporting on credit for recently from years ago in all states/counties. Generally, if it is outside the SOL reporting on LEXIS NEXIS, it is not relevant. I'd be surprised if Fraud Guard picked up the judgment, LEXIS NEXIS would, but hardly any lender uses as it is so costly. And again, outside the SOL is not relevant. The problem is when a recent judgment shows up on Lexis Nexis and not the credit report, it is an automatic manual downgrade
  11. it is funny, I remember working in loss mitigation under HAMP in 2010 and telling a borrower modifications are not negotiable, we follow guidelines set forth by the US Treasury and this is the only modification offer have as set forth by the guidelines. He was under the misimpression like so many they were somehow negotiable. He told me "ALL MY FRIEND TELL ME WE HAVEN'T REACHED THE BOTTOM! I WANT THE PRINCIPAL REDUCED!" I asked him "DID THESE SAME FRIENDS ADVISE YOU IN 2005 WHEN YOU PURCHASED YOUR HOUSE YOU ARE BUYING A BUBBLE????? BUT NOW THEY ARE EXPERTS?" I told him the real estate market is cyclical, it always has been, it will eventually come back. i'm not sure we are in bubble or not. but i am considering a 2nd part time job auditing files/forensic underwriting. when the market goes to crap or MI/INVESTORS/third party companies get nervous about a crash or increased defaults, they audit the heck out of their portfolios to escape liability for an approved loan that shouldn't have been approved.
  12. As an underwriter I see this all the time. All the time, maybe hundreds of times. Incredibly rare to see an exception due to extenuating circumstances. They must be supported with satisfactory documentation, in this scenario, an agreement was made to foreclosure and their was a finding by court of RESPA violations, only a settlement agreement. Even if the settlement agreement stated lender was guilty of respa violations, which would be odd guilt is admitted in a settlement, it wouldn't necessarity validate an extenuating circumstance by FNMA or FHLMC. A complaint is not a verdict of guilt, only an allegation to a neutral third party and without a finding and documented verification of how that finding let to the inability to pay, it wouldn't document extenuating circumstances.
  13. i've been so busy working 60-65 hours a week - now i'm working 40 remotely and think i have time to trade again! Fidelity has my IRA account with included various rollovers from past employers. Fidelity has the best 401k's when offered by employers, easy access easy transfers.The best, smart move on their part, there are alot of people like me that have condensed their old employers 401k's by transferring to Fidelity and holding in an IRA.
  14. Wait a minute - Her NET income, tax-free, is $3200. That is not the same as GROSS income. Tax-free income is common in retirees - not only Social Security, but tax-free municipal bonds, certain annuities depending on the source of funds, etc. Don't financial institutions have a way of making an apples-to-apples comparison? I've heard the term "grossing up" tossed around, specifically in cases of tax-free income such as this. Making this adjustment would yield a more favorable DTI. Brian B, what say you? max gross up is 15% which must be supported by tax returns - this is VA and FHA -, i.e tax returns show income as 100% non-taxable or only the portion declared as non-taxable per the returns can be grossed up. if the borrower states they are not required to file, transcripts will still be executed to verify no income claimed. more importantly, this is VA - and there will be monthly maintenance of .14/sq foot added to expenses and most importantly on the gross up - the grossed up portion is added back into expenses. more often than not, adding back in the amount grossed up is wiped out when it is added back into expenses. tricky, but VA is unique from other investors in the residual income calculation. i've seen VA aus approvals at 64% that had sufficient residual and refers at 38% that must be a refer by guidelines due to insufficient residual income.
  15. That is true. Some lenders use Lexis Nexis in underwriting or quality control. I have worked for lenders that use Lexis Nexis and it would find judgments all the time that weren't on the credit and were undisclosed within SOL. Most lenders don't like using Lexis, they really don't want to find judgments on the borrower preventing an approval.

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