desperate to back out of mortgage process, please help

sarah · Joined: 10 Aug 2005 Posts: 4

Hello everyone,

my husband and I fell in love with a new community in texas and decided to have a house built there. we've just relocated from the UK and have very very bad credit there. since we havent been in the US long we dont have much credit here either.

when I got the good faith estimate I noticed they'd left out all of the options we added to the house and that the estimate cost of the mortgage per month would be over 50% of my husband's monthly income (he's the only borrower, I have no income).

they've been pushing for us to get them proof of our credit in the UK so they can approve us. little do they know just how bad it really is.

since the GFE we've decided the house is just going to cost us too much per month and instead we've entered into a 13mo lease with an apartment complex.

the lender / builder have $1618 in earnest money and options deposits. Im desperate to get this money back. they said the only way we'd get it back is if we didnt qualify for the mortgage but Im really worried they'll do anything to try and approve us so that we cant back out without losing the earnest money.

what are my rights and what should I do? do I have any options at all?

thank you,
sarah

The Mortgage-Pro · Site Admin Joined: 19 Jan 2005 Posts: 2248

Do you have anyone representing you in this transaction?

You should have some wording in your contract to allow you to get out the contract if your interest rate is above a certain %.

Furthermore, I have never heard of a bank looking at the credit of a borrower from another country.

sarah · Joined: 10 Aug 2005 Posts: 4

Hello, thanks for your reply

No we do not have anyone representing us.

I'll look in the contract for what you mentioned.

If Im reading you correctly, I believe that the lender does not believe that we will qualify based on my husband's current credit rating in the USA and wished to check his UK credit to help along the overall picture of us being a good risk. I guess here in Houston lenders often times can check credit abroad due to the fact that so many people here in the city come from abroad as employees of oil companies on a transfer. We dont work for any of the oil companies and came to the US to be closer to my family, but I guess the lender is attempting to apply the same proceedure to us.

I can tell you that the application is for an FHA mortgage. Ive found online that the total debt to income ratio cant be more than 41% to qualiy. They've quoted (not including the jump in cost for the addition of options) $1700 per month for the entire mortgage payment - my husband brings in only $2600 on average per month. The only debt we have against this income is a $69.00 payment per month on a piano. Am I right to believe that our debt to income ratio will be way above the FHA limit of 41%? Could this be enough to disqualify us from the loan?

The Mortgage-Pro · Site Admin Joined: 19 Jan 2005 Posts: 2248

Your debt to income ratios seems too high for any type full documentation mortgage loan. I hope you can get out this predicament. Please let us know how this works out for you.

sarah · Joined: 10 Aug 2005 Posts: 4

Thanks.

One more question...

I was reviewing my documents today.

The HUD website states that RESPA Law requires lenders to provide a Good Faith Estimate no later than 3 days after date of signing of application. Our application was signed on 06/04/05 and the GFE is dated 07/11/05, which is WELL after the 3 day limit.

What can I do to request my application fee back as they have not followed federal law? Do I have any recourse against this?

THANKS

The Mortgage-Pro · Site Admin Joined: 19 Jan 2005 Posts: 2248

Hello Sarah,

That is a good point. Get a manager on the phone and tell them if they do not get your issue resolved today, you will call HUD and the banking department to file a complaint.

sarah · Joined: 10 Aug 2005 Posts: 4

thanks

The Mortgage-Pro · Site Admin Joined: 19 Jan 2005 Posts: 2248

No problem, good luck with your mortgage fiasco.