Self-Employed & Screwed but Wells Fargo Says Maybe?

I use it all the time.  It is a program for good credit persons such as you where they run you through theri Automated express program.  If the AU (automated underwriting) likes the file, they approve with no income or asset documentation. 

Funny how this sounds like "sub-prime" but hell no one cares because it is sold to Freddie mac in this case.  Good God! 

Anyway I had one the other day that was a 63% CLTV with a first and a second to $565k total financing with Wells and they approved via mortgage express and then did a pre-doc audit for full tax returns and a 4506 to come back from IRS.    Since I submitted and had all the income info, I did not trip but had to waith another 9 bus days to get the 4506 from the IRS. 

so . . . just go with the flow but be careful. 

Are you in Ca??

Nope, I'm in AZ but I'm buying in Boise, ID...

If they just shoot it through I should be ok, but if they start looking at the returns (and go to the adjusted gross vs. the gross), I guess it will fall apart on underwriting.

It's so frustrating...  This has been the ONE thing I've found that sucks about being self-employed. I've been working hard and saving a big down payment only to find out that I have a snowball's chance in hell of actually getting a loan. What a weird time...

KR

You are all good.  Just let Wells run it through.  In general lending has tightened.  It has nothing to do with you.   Keep doing what you are doing: keep working and making money. 

The loan will take care of itself.  If it is meant to be it is. 

Good luck!

Get a good broker in Idaho, trust me. Wells wholesale beats the crap out of what you will get retail and with Wells it's really all about the packaging for Mortgage Express. If it's tied up with a pretty bow on it, you will be fine. Don't go retail, you will regret it. And I promise you this is not a sales pitch.

Mike,

Where are you getting your 4506 from, try here, they are pretty fast.

As far as I know, WF no longer has "mortgage express".  They do have "direct express" which is their newish loan submission system.  I'm not signed up with Credco so I can't use it (yet).   But from what I've been told on the good credit loans the approvals are going through not asking for income docs.

Wells does do random 4506 audits and if your shown income isn't within 20 or 25% of the indicated income they will require full doc.

Sir-  Mortgage Express is a great program.... It works exactly as it has been described to you.

Here is a hopeful story for you, it happend to me yesterday:

I have a client who has been self-employed since 2000..... He has a mid FICO of 790..... he is putting 20% down on a $390k purchase price.... His debt ratios are low......   My underwriting system gave me a "Straight To Close".... this means I did not need to collect tax returns, pay stubs, bank statements, or anything else......   This was with a traditional 30 year fixed, conventional mortgage.

So the answer is yes..... this is coming straight from Wells Fargo.... You do have options with Mortgage Express, and with a traditional program (if your financial situation fits)....  There are fewer options out there than there were 6-12 months ago--  but we still have some left.

The posts in this forum were very good... .let any of us know if you have any questions.

Stop drinking the Kool Aid!

I got the same results on a 2nd home stright through Fannie...Good loans can still fly through the systems.  Call it what you want...all it is is a Doc Waiver...

Jonathon, does the " or anything else " mean he does not sign a 4506? I assume when you say he has been self employed since 2000 and has low debt ratios, that the income was stated high to achieve those ratios. In that case, if you do a 4506 and the income is 40% different are you saying it is not a problem? Or, are you simply saying he is self employed, makes a lot of money, debt ratios are based on his actual income but because his scores are so high he is getting an accept plus? Just curious.

Yes, he does have to sign the 4506,  but nothing has been overstated-  I collected his tax returns up front, before I even submitted the loan into my automated underwriting system.  I entered his legitimate income directly off of his tax return, entered his reserves/assets directly from his bank statements, and took his debts directly from his credit report.

This IS how mortgage lending is supposed to be.... Collect documents FIRST, then fill out the application.... NOT state first, see what happens later..... Call me old fashioned.

I respect the question Clay, thank you for your input.

Gullgoast . . . Yeah they approved via mortgage express no income no asset, but then did a pre-doc audit.  I had already got everything from the borrower and simply asked them to move the audit PTC since all the income (06-07 w-2s and $1.1MM in verified assets- 804 fico - hubby is a nuclear scientist in Berkely) and I even said to have the borrower sign a hold harmless since the loan was locked at 5.5% at the time and we were getting close to expiring. 

They said no even though I faxed all the income to them anyway.  They cleared the 4506, doc'd it and funded and I paid for a lock extention. 

KRB,

Unfortunately your stuation is not what any of those programs are designed for.  Having said that, I would not be shocked if you get approved and close.