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  • DK09
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Loan terms change two weeks until closing

   
  • August 11 2009 - Encinitas
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Answers (29)

Congratulations DK!

You did get lucky in this new age of tighter underwriting. Happy for you that they worked with you to this conclusion! ... I'm sure your parents are happy as well. .... Thank you for getting back to us with your great news. .... Best wishes to all, Rudi
  • August 17 2009
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  • DK09
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I pushed back on Chase was able to get the loan that I applied for (2nd home rate) and about a week later, its approved.  It is a fannie mae loan and luckily they followed the guidelines.

Thanks everyone for your support!
  • August 17 2009
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  • DK09
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Thanks for your answers. Chase this morning wanted a letter stating what this property was for. I told them that due to my father's recent medical condition he is unable to work and therefore qualify to buy a home on his own. This is why I am the primary source of loan qualification. (I told this all up to Chase when I first signed up). I can provide documentation on this. It was really hard for me to put this in writing because facing the reality of his medical condition is not easy. Now the Mortgage Consultant and the Underwriter are trying to work it out. So I have a little hope. It's a shame that one department could not talk to another when I paid $400 for this loan. Wish me luck. I'm just trying to do the right thing for my parents.I'll update the board when I hear more today
  • August 12 2009
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DK,

I hope for your sake the loan contingency is still in place on your purchase agreement. If not, you stand to lose as much as it will cost to finance your purchase as an investment property.

I know that I couldn't get the highest qualty loan funded within two weeks, due to the new regulations that went into place on 7/30. .... I wish you well, Rudi
  • August 12 2009
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Tim is correct on this.  Fannie allows for this.  Calling Fannie doesn't matter, if chase won't do the loan then you have to find another lender that will.  Nothing says a lender has to follow Fannie Mae Guidelines.  In reality very few do.  Most have overlays.

Gregorio,

I would have to disagree that this is a second home.  You may be able to push it through, but as Rudi pointed out, it is not in an area that 2nd homes are common.  The truth is the OP is buying it for his parents to live in.  That is perfectly acceptable to Fannie Mae, so why complicate it and turn it into something it's not.
  • August 12 2009
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This type of loan is a Fannie Mae loan so I am going to contact Fannie Mae this morning.  I guess my question for Chase is, does Chase follow Fannie Mae guidelines?  I guess banks can pick and chose which ones they do and do not follow?  Thanks for the help everyone.
  • August 12 2009
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Have your loan disclosures in your hands and start asking questions as to why the terms changed.  Your credit scores, income and down payment probably haven't changed. Was your loan locked? I would call another local lender and get a second opinion. Take control of your loan process and know your rights.  Chase has been bouth out and I am sure there is a lot of confusion in their processing center. 
  • August 11 2009
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If Chase doesn't play ball with you, then two weeks is still doable from start to finish if you get things moving forward tomorrow with another bank. If they want to only consider it as an investment property then a few things would happen if you stuck with them; the rate/points would change, the hit for investment properties is at least 3 points (@$5,000) at your LTV (77%). It get slightly cheaper at 75 LTV (1.75 points @$2,800) or the rate would increase significantly to absorb the points. In addition the appraisal would have to be changed to reflect it as investment, possibly a rent analysis would be needed from the appraiser.



  • August 11 2009
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just for the heck of it I will update this tomorrow with my new loan terms from Chase.  Hopefully they will refund my $400 loan fee.

So my next step is finding another loan and calling my realtor.  I already wrote a check for $6k escrow (thats been cashed) to the title company.  What happens next?  Will this just mean my closing date is delayed?
  • August 11 2009
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This loan can be done as a second home in my opinion, you just need to find someone to do it. 
  • August 11 2009
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We have the same thing. We just never gave it a fancy name
  • August 11 2009
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  • DK09
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looks like it was/is a fannie mae program that Chase no longer offers

If you google chase family opportunity mortgage you will see it
  • August 11 2009
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Is there a  Fannie Guideline that says 50 miles? I have the guidelines as follows:


Second Home Requirements:
· Property must be suitable for year-round occupancy, but not under a time-share arrangement
· Borrower must occupy the property for some portion of the year and have exclusive control over its use
· Property must be located within a reasonable distance form the borrower's principal residence
· Property must not be subject to a rental agreement that requires the borrower to rent if or that gives a management
firm control over its occupancy
· Rental income may not be used to qualify the Borrower
 
Tim, were you talking to me about a cut and paste? I quoted what you said, that's what those funny ""'s are for and responded to it.

And Rudi, Read this. Gotta love Google.
  • August 11 2009
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I have no knowledge of a "Family Opportunity" Product. Your primary residence is in Encinitas. Temecula is only 46 miles away and it is not a vacation destination. Although it is scenic and folks do visit for it's vineyards and avacado groves. .... You are purchasing an investment property. Regardless, if your parents pay rent or not. At 80% LTV you will have about 3.25% in N/O/O fees. At 75% LTV 1.75% - 2.00% in fees. ... You could get lucky with the 2nd home scenario. But, in this strickter enviornment, it's an investment property. .... Good luck, Rudi
  • August 11 2009
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Fannie Mae doesn't originate loans, you'll need to talk with a lender that originates to Fannie Mae (we're primarily Fannie Mae, whereas the company with the large ad to the right is primarily Freddie Mac). It's actually a  little known guidelines, I could probably poll people here at SunTrust and some of them wouldn't know it exists.
  • August 11 2009
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Thanks I can try Fannie Mae tomorrow.  Chase hasnt provided me with a new rate yet.  They are supposed to tomorrow.  I cant believe they changed the terms so late in the game, I can understand if I did something wrong - but thats not the case here.  Feels almost like a bait and switch
  • August 11 2009
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G: you cut and pasted my reply in the same thread?
DK09: Chase may underwrite to Freddie Mac rather than fannie Mae, or they may choose not to follow the Fannie Mae guideline on this.
  • August 11 2009
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Chase said it was an investment property because it did not meet the 50 miles or more requirement
  • August 11 2009
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"Fannie Mae lets you treat this as a primary residence when purchasing a home for an elderly parent(s) or for a adult child with a disability Fannie Mae will consider the transaction as owner occupied. You will need to show that your parents are on a limited fixed income (their recent tax return). You would get the same loan terms as for any primary residence loan."

They will get the same loan terms as a second home as well with less paperwork.
  • August 11 2009
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it is 46 miles away.  I was buying the home so my senior parents with little income could live in it.  I guess I could stay with them for two weeks

Fannie Mae lets you treat this as a primary residence when purchasing a home for an elderly parent(s) or for a adult child with a disability Fannie Mae will consider the transaction as owner occupied. You will need to show that your parents are on a limited fixed income (their recent tax return). You would get the same loan terms as for any primary residence loan.
  • August 11 2009
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Last question, why did they say it has to be an investment property now?
  • August 11 2009
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purchase price was 216500 with 50k down
rate was 5.25
credit score was 720's
30 year fixed
  • August 11 2009
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Well the investment property adjustments are significant, I would speak to someone else about your specific situation and see if you can buy it as a second home still. 

What is the purchase price, LTV, rate you had, your credit score? 
  • August 11 2009
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No its in Temecula.  I have only talked with the mortgage lenders at Chase.  This will be my second home as I live with my husband in Encinitas, but I am not on his mortgage
  • August 11 2009
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I assume you are talking about the Fallbrook property? Without knowing all the details it's hard to say what you can or cannot do. If you are buying a second home, there are guidelines that you have to meet. Have you spoken with anyone else to see if this property will actually qualify?
  • August 11 2009
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it is 46 miles away.  I was buying the home so my senior parents with little income could live in it.  I guess I could stay with them for two weeks
  • August 11 2009
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If this is your only other property other than your principal and it is ample distance from your residence then it qualifes for a second home if it is around the block it does not, you do have to occupy the property  2 weeks out of the year.
  • August 11 2009
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the lender is Chase,  I was originally approved for the family opportunity mortgage loan and that would mean this would qualify as a second home.  Now the underwriter says the program doesnt exisit and they want to change it to an investment property.  This would be at a higher cost I am sure.  I paid almost $400 to get this loan at the lower rate.  Now that I am over the barrel they are changing everything.  Is there anything I can do?
  • August 11 2009
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Who is the lender?
Why and how did the terms change?
Is it a purchase or refi?
What do you have invested in the transaction so far?
 

 
  • August 11 2009
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