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FHA - Contigent approval, NSFs, Couldn't get loan... what next?

My partner and I were unable to secure an FHA loan after being in escrow. We had 3.5% down, home is $691K. DTI 53%, so OK'd by the AU. Two issues occurred during UW.  First, my partner and I have many NSFs from earlier in the year - due to mismanagement of bank account, no good excuse.  Our FICO scores are in the 650s median, so not great.  Strong income and income history, a bit of student loan debt. My partner's car lease is $750 a month. My lease is under my mom's name, hence it wasn't reported.  Well, UW saw the auto debit it in the bank statements and wanted proof I hadn't made the payments over the last year.  With the extra car, our DTI would be too high for this house. Our loan officer in turn, said his UW would do him a "favor" and look past the bank statements (ignore them), if I can get my mom to infuse the 3.5% down ($25K).  She did, and gave a gift letter.

We tried to get a new broker, comments were that the damage had been done, as the notes would be in "the system" and any new lender would see all the layers of complication on this loan.

Fast forward, we cancel escrow and the sellers approach us into renting the property, and then transferring the lease into a purchase at our originally agreed upon price when we are able to secure the loan.  We love the house and would like to do this. Here is our plan: open a new bank account (we already have), transfer our deposits there, trade in his car for a cheaper one, and get rid of our second car (which, again, is not listed as a liability under my name as it's a lease under my mom's business), pay off/down credit card debt, wait 2-3 months, then reapply for a FHA loan on the property. However, an FHA case stays active and assigned to a property.  What should we do about that? Try and get the case cancelled, then start a new case later? If not, then the new UW will see all the previous notes, and deny our loan all over? 
  • August 07 2012 - Brockmont
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Answers (1)

Profile picture for Mike Politzer
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  • August 08 2012
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