If you are looking for firsthand knowledge about the headaches of trying to get a mortgage through the big banks or large lending institutions and dealing with FHA Back To Work you have stumbled on the right article. What I found is that, if you don’t have stellar credit and adequate funds in your possession for a down payment, good luck getting any attention from these guys.
Let me be honest with you, I don’t have excellent credit by any stretch of the imagination. 5+ years ago I had a bankruptcy and foreclosure which left my credit with a big black eye. What happened was there was a loss of a job, but as they say, so was life during the recession. When your household income is cut in half, it is hard to stay current and afford everything. We did what we had to do and we moved on. We slowly got credit cards back in our names, financed a vehicle, and had a perfect 2.5 years of payments while renting so we were slowly building up some positive history.
I was under the assumption that I needed a 4-5 year waiting period before I was ever going to be able to buy a home again, but I was totally wrong as I was under the impression of conventional loans. Then help came to me in August of 2013 in the form of FHA’s “Back to Work” program. Per the FHA’s release: “Provide minimum underwriting standards and criteria for evaluating borrowers who have experienced an Economic Event, as defined in this ML, that resulted in a severe reduction in income due to a job loss or other circumstances resulting in reduced Household Income.”
If there was ever a perfect scenario for my situation this was it. We lost 50% of our household income, we experienced adverse credit events, we righted the ship and got our financial situation back in order. My first thought was “let me start calling banks and mortgage brokers and since FHA told lenders to start approving loans with these qualifications, I should get approved no problem!” Boy was I ever wrong.
I called and emailed about 15 or so lenders in the span of about 2-3 weeks and honestly, nearly every answer coming back from them was 1 of 2 responses:
1. Just because FHA wants us to do this, doesn’t mean we have to. We need to take time to investigate this fully.
2. This is going to require a manual underwrite, so we aren’t going to do that. (What this means is in these cases a physical person is going to have to review the file, determine the event, and make sure the borrower has met all requirements.)
This just showed how lazy big banks and mortgage lenders are. These institutions don’t want to do the extra work to get a potential borrower a home who truly deserves it. What these institutions want to do is put put borrower’s info into Desktop Underwriter or Loan Prospector (these are Fannie Mae’s and Freddie Mac’s automatic underwriting software) and have the computers tell them who should or shouldn’t receive a loan. If the mortgage industry was this easy, everyone would be doing it. Anyone can do this as a mortgage loan originator or mortgage underwriter, but in my case, I needed someone who actually cared about my situation and wanted to help me.
So after a few weeks of doors getting repeatedly closed in my face, I finally came across a Google search for “FHA Back to Work” and returned in my search. I initially thought, let’s give him a shot, everyone else has told me “no,” so I was fully prepared to get rejected again. Gladly, I was wrong, they knew all about this new loan program and after going through my background and credit history he felt that I was a prime candidate to get approved to purchase again. Unlike a conventional loan, the documentation needed for this program is extensive as borrower’s need every last qualification approved or they will be sunk.
The underwriter will comb thru everything in your history, the economic event, your bank statements, tax returns, bankruptcy filings, foreclosure filings, etc. I did my best in getting the underwriter the required documents and “letters of explanations” (lox) to finally get approval to purchase my home within 30 days of reaching out.
If you have recently gone through some tough times, just stay positive and know that there are programs out there for you to use. The worst thing you could ever do is go to the big banks or lenders as you will get the door slammed in your face every time. If there is the slightest hint of risk, you will almost automatically get a “no.” You just can’t take this to heart, as you need to find the right lender for you and your situation.
Just as I was helped get me back on my feet, I want to return the favor and bring happiness to others that are in similar situations to mine. I am a licensed loan officer and know for a fact we can get you approved with an FHA Back To Work Mortgage. When most other lenders will tell you “no”, I am someone that will tell you “YES.” Please reach out to me and we can go over your history in detail and get you approved. I can be reached at 888-900-1020, or you can inquire directly at www.loanconsultants.org. I look forward to helping everyone I can!