Help In escrow & now denied because don't meet occupancy requirements...Now what?

angelinafina
Contributions:13

I'm jumping in here to ask some advice. I am working overseas for a US based company. I have R&R's every 3-4 months for up to a month at a time. File tax returns and get the foreign income exemption for being outside the country. Income is $140K per year, over $200,000 in cash with ING, no debt. I currently own a home in Florida and live with my girlfriend of 17 years. Current Mortgage in my name, title in both mine and my girlfriend of 17 years (her credit is not good). Just put an offer in on house down the street that is bigger and a great deal (bank owned). We plan to move into the new house and rent the current home and wait to sell til the market gets better (it is $70,000 underwater). Offer was accepted with 20% down, in escrow, ING pre-approved, all documents presented and now underwriting just denied the loan due to owner-occupancy not meeting their requirements. They said it was because I was overseas. What do I do? It will be our primary residence and my significant other will live in it full time. She also has my full POA for the closing which has been accepted by the Title Company for a March 1st closing HELP??? Ideas asap...PLEASE... We need to get another lender quickly but will I have the same problem??? It seems so unfair that I would have to get a non owner occupied mortgage at a higher rate when I intend to have this as my HOME!

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January 29 2012 - US

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Answers (9)

Dan, "the_country_hick"
Contributions:4827

Would the situation change at all if the girlfriend became the wife and would live there?

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January 29 2012

Norm D Plume, "Coolidge or Chaos"
Contributions:2306

check with whichever lender you're speaking with to price it out for you but the difference could be anywhere from 1/4% to 1/2%.

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January 29 2012

angelinafina
Contributions:13

Thank you all...these answers and suggestions are helpful. As to banks being hyper-sensitive these days...I get it. The thing is I have both US and NATO Security clearance and would never do anything to jeopardize those. If it must be done as an investment property then so be it.

How much more will it cost for an investment loan??

Norm, you mentioned that 25% down vs 20% would make a difference...any idea how much of a difference?

Thanks again everyone!

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January 29 2012

jablum
Contributions:17

I feel bad for you. I hope evrything works out. The banks are really making poeples lives hell these days. I wish we the people could do something about the way they are treating good buyers.

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January 29 2012

Norm D Plume, "Coolidge or Chaos"
Contributions:2306

I'm not going to try to address each twist of your question, however; from experience I get a lot of DOS employees stationed abroad and buying in the US.

The home is considered a 2nd home and is underwritten under 2nd home guidelines. however.....

..........Your treatment under this may be hindered because you already own a home; in the same neighborhood.

If you find you have no alternative but to go as investment, I'd suggest 25% down, you'll find the pricing much improved compared to 20% down.

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January 29 2012

Andrew Adams, "RenovationSpecialist"
- (4 reviews)
Contributions:9404

No way is that a primary residence. You work overseas so your primary residence is overseas if anything it's a 2nd home and since you already own a 2nd home (Not as in multiple homes but as in owner occupied but not a primary) in Florida. I personally don't think I could successfully argue that it was a 2nd home. Unless the current home was listed for sale or rented Even then I am not confident that I would be able to make the case to the underwriter that it is a 2nd home.

I would say plan on buying it as an investment property. I know it's not what you want to hear but it is extremely likely that will be the only way you can purchase the home.

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January 29 2012

Bill King, "Bill King"
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Contributions:33

Banks are hyper-sensative to the practice many people engaged in of buying a home after prices have declined, taking the same steps you are taking, but instead, after moving in to the new house, deliberately defaulting on the one that was under water. Unfortunately there have been some loan brokers advocating this practice, and consequently the banks are rightfully concerned when they see someone making a local move and declaring that the existing home will become a rental. Using a local lender (community bank, credit union) may gain you more personalized underwriting. You may also consider applying some of your cash reserves to the principal balance of the first home to give you net-positive equity. The bottom line is that one of the two homes will not be owner-occupied, so perhaps having a bona fide lease for the home you are moving from would help in underwriting as well.

All the best,
Bill King
Coldwell Banker Bain

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January 29 2012

angelinafina
Contributions:13

Thank you Pat for the reply. Plan on talking with local bank tomorrow. What are your thoughts on obtaining loan working through a mortgage broker? Would that ensure best rate? What about search on this site? Seems like lots to choose from but some are far away??

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January 29 2012

Pat Pribisko, "Pat Pribisko"
- (1 review)
Contributions:2002

I suggest that you speak to loan officers at local bank (local to the new home) to determine if you can obtain a rate lower than you have been quoted. However, what you have described puts you in the category of an investor and you should be charged the interest rate of an investor for the new home.

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January 29 2012

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Help In escrow & now denied because don't meet occupancy requirements...Now what?

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