Upcoming Foreclosures

Trying to close on a "unique property" and lender doesn't like comps?

We are trying to purchase a home that is a foreclosure. It is in a rural area. Our loan officer has given us pre-approval and everything...appraisal has been done and repairs made...re-appraisal went well and appraiser approved everything as good to go. Well the lender didn't like the comps that were submitted. Long story short, appraiser has revised his report so the comps would be a better comparison, and file has been submitted to a new lender. My LO feels confident that this deal WILL go through, but we are nervous wrecks waiting on the answer. Will this second lender know that the file had previously been submitted to another lender, and if so, will that affect their decision? What are the chances of approval based upon this information? How much should we trust our LO's opinion on whether or not we get final approval? She has been really great throughout this hellish process so far. Any thoughts, input welcome. One other thing - this is an FHA loan. Boyfriend's credit great, mine not so much. (we are unmarried at the moment) LO says all is well with credit, and remember we had a pre-approval with all supporting documents. Hope that's true!

Public Comments

1. In this market, it is not at all unusual for an appraisal to be rejected for modification, for any of a variety of reasons. Lenders want to be fully assured that the property in question has a current market value of what is claimed in the appraisal. A pre-approval is merely worth the paper upon which it is written. Until an actual approval is received, you are in no-man's land. Approval is purely at the discretion of the underwriter handling your file. If he/she doesn't like your BF's debt ratio, you won't get approved. Same goes for the appraisal involved. Remind your BF to do NOTHING which might affect his debt ratio/credit score until you have closed this deal. I've seen applicants who were approved to buy a house, and then decided to go out and splurge on thousands of dollars of new furniture for their new home. It put them over the acceptable debt ratio, and they got last moment denials. Yes, his credit and employment information will be verified at the last moment, as a final check.
2. Sounds like you need a new appraiser. There should never have been a question on comparable properties. Either the appraiser used comparables or the appraiser didn't, and he didn't, you didn't get your money's worth. The new lender won't find out about the rejected loan unless he sees where the previous lender checked your credit and calls them, ( a one in a billion chance ), or someone tells the new lender about the rejected loan. Even if the new lender finds out, it is not uncommon for a lender to reject a loan if it doesn't meet their criteria for a loan. The new lender will go on their own criteria for making the loan. So if the paperwork is in order, you shouldn't have any trouble at all.