Posted on: 30th Jan, 2009 11:19 pm
my home has a mortgage with jp morgan chase with principle of about $350,000. the value of the property, even in this market, is easily over $1,000,000 -
my credit ratings are the highest that exist.
i have never missed a single payment.
i have a good faith letter for refinancing - my interest over the new term would be locked in at 4.75% (from 5.75%)
the refinance is now denied, after $400 in fees, on this basis:
i sold a company for $10,000,000 and began a similar startup in 2006. it is a nys sub-s corp so i get a k1 loss pass through to my personal income tax.
jp morgan-chase now requires "business accountant to explain the 2007 business loss on 1040's and to confirm that 2008 should not show a loss to the borrower's personal tax returns"
the size of the loss, about $40,000 in 2008, is miniscule compared to the value of the property, my net worth, and there is no risk as i am doing a refinance with the same lender.
i do not believe there is a legal basis for the bank to rescind it's "good faith" terms, and no one at the bank really can justify this bizarre point of denial.
here is a sample of the replies i have received"
"when our decision engine looks at a loan it takes many things into
consideration. so to answer your question there really isn't a hard line on
the ratio. the system compiles all the information to reach a decision. i
know that may not truly answer your question, but to be honest each loan is
unique."
i have about one-more month to place a charge-back on the fees paid by credit card.
i think that my taxes are being used to pay for bad investments of the banks including jp. morgan chase. to qualify for federal money the bank must show that it is using some of the money to originate loans. however, if the loans don't close they keep the money. so they bait and switch. they may also be stealing the fees if the "good faith" terms were made in bad faith. if these fees are being collected from thousands of credit-worthy taxpayers, that would be conspiracy and fraud.
i am not trying to be an attorney. i am just trying to defend my rights.
my question, finally, is this: given the facts, is there a rational justification for the point of denial (a $40,000 business loss in 2008 on a high-tech start-up company); is there a legal basis for this rescission of refinance terms, and if so, where is the statute?
thank you
my credit ratings are the highest that exist.
i have never missed a single payment.
i have a good faith letter for refinancing - my interest over the new term would be locked in at 4.75% (from 5.75%)
the refinance is now denied, after $400 in fees, on this basis:
i sold a company for $10,000,000 and began a similar startup in 2006. it is a nys sub-s corp so i get a k1 loss pass through to my personal income tax.
jp morgan-chase now requires "business accountant to explain the 2007 business loss on 1040's and to confirm that 2008 should not show a loss to the borrower's personal tax returns"
the size of the loss, about $40,000 in 2008, is miniscule compared to the value of the property, my net worth, and there is no risk as i am doing a refinance with the same lender.
i do not believe there is a legal basis for the bank to rescind it's "good faith" terms, and no one at the bank really can justify this bizarre point of denial.
here is a sample of the replies i have received"
"when our decision engine looks at a loan it takes many things into
consideration. so to answer your question there really isn't a hard line on
the ratio. the system compiles all the information to reach a decision. i
know that may not truly answer your question, but to be honest each loan is
unique."
i have about one-more month to place a charge-back on the fees paid by credit card.
i think that my taxes are being used to pay for bad investments of the banks including jp. morgan chase. to qualify for federal money the bank must show that it is using some of the money to originate loans. however, if the loans don't close they keep the money. so they bait and switch. they may also be stealing the fees if the "good faith" terms were made in bad faith. if these fees are being collected from thousands of credit-worthy taxpayers, that would be conspiracy and fraud.
i am not trying to be an attorney. i am just trying to defend my rights.
my question, finally, is this: given the facts, is there a rational justification for the point of denial (a $40,000 business loss in 2008 on a high-tech start-up company); is there a legal basis for this rescission of refinance terms, and if so, where is the statute?
thank you
Hi QC,
When a lender approves a loan or refinances a loan, he looks into the credit and income details of past 2 years at least. Thus, after the lender found a loss of $40,000 in business in 2008, he may have though you will not be able to pay off the dues and have just denied a refinance.
In my opinion, you should contact a mortgage attorney in order to deal with the lender. He may look after all the documents and decide what steps you may take in this regard.
Moreover you should also note that you will be able to refinance your loan with other lenders as well. So if your current lender is not refinancing the loan, check out the rates and terms with other lenders as well. You may also speak to the lenders of this community and seek a no obligation free consultation and get to know the type of rates you can expect.
Thanks.
When a lender approves a loan or refinances a loan, he looks into the credit and income details of past 2 years at least. Thus, after the lender found a loss of $40,000 in business in 2008, he may have though you will not be able to pay off the dues and have just denied a refinance.
In my opinion, you should contact a mortgage attorney in order to deal with the lender. He may look after all the documents and decide what steps you may take in this regard.
Moreover you should also note that you will be able to refinance your loan with other lenders as well. So if your current lender is not refinancing the loan, check out the rates and terms with other lenders as well. You may also speak to the lenders of this community and seek a no obligation free consultation and get to know the type of rates you can expect.
Thanks.
in my experience, there is no such thing as a "mortgage attorney." attorneys who specialize in real estate will have knowledge of mortgages, but that's not going to be a specialty, i will opine.
what we have here is too little information. we have no idea how the $40K loss affects the rest of your income. clearly, the underwriter is concerned, so that kind of puts a red flag up for those of us with no working knowledge of the deal.
what is a "good faith letter for refinancing?" are you referring to the good faith estimate you would have received? if so, you'll find, pretty clearly stated, that a gfe is definitely not a commitment to lend, but merely an estimate of the costs of your transaction.
did you have a commitment to lend that was free of conditions? if so, you may have a case. if not, then what were the conditions, and did you have a commitment to lend in the first place? nowhere do i see the word "commitment" in the post. that leads me to believe there had been no formal approval on your prospective loan.
what we as a people fail to understand is that lenders have the money - it's their money...we ask them to lend to us, and they have to make a determination if the risk involved is sufficiently low as to make lending the money to us makes sense. in this particular instance, it appears the lender has made the decision that lending to you is too much of a risk to make sense. i would have to suggest that this kind of a decision is not fraudulent, and that you'll be hard-pressed to find a particular statute in any book of law that will allow or disallow the denial of a loan.
again, we really need more information to be accurate in analyzing your situation.
what we have here is too little information. we have no idea how the $40K loss affects the rest of your income. clearly, the underwriter is concerned, so that kind of puts a red flag up for those of us with no working knowledge of the deal.
what is a "good faith letter for refinancing?" are you referring to the good faith estimate you would have received? if so, you'll find, pretty clearly stated, that a gfe is definitely not a commitment to lend, but merely an estimate of the costs of your transaction.
did you have a commitment to lend that was free of conditions? if so, you may have a case. if not, then what were the conditions, and did you have a commitment to lend in the first place? nowhere do i see the word "commitment" in the post. that leads me to believe there had been no formal approval on your prospective loan.
what we as a people fail to understand is that lenders have the money - it's their money...we ask them to lend to us, and they have to make a determination if the risk involved is sufficiently low as to make lending the money to us makes sense. in this particular instance, it appears the lender has made the decision that lending to you is too much of a risk to make sense. i would have to suggest that this kind of a decision is not fraudulent, and that you'll be hard-pressed to find a particular statute in any book of law that will allow or disallow the denial of a loan.
again, we really need more information to be accurate in analyzing your situation.
Thank you. I recognize your points. I shall try to focus on the salient aspects of my particular transaction.
1 - re-fi is with the same lender
2 - they are charging fees, so if they don't close, it could be a fraud, if being done thousands of times in bad faith
3 - in this climate, they are under pressure to "use" bailout $ they would rather hold than lend
4 - the collateral on the property renders their denial ludicrous - please see the quote from a loan officer in original post
5 - the small loss carried forward is - in effect - discriminatory. If I were retired - (net worth is > $15mm) it would not exist. If it were a C-corp instead of an S-Corp - it would not show on my personal returns.
I truly appreciate your advice. Please take a second look at this query.
1 - re-fi is with the same lender
2 - they are charging fees, so if they don't close, it could be a fraud, if being done thousands of times in bad faith
3 - in this climate, they are under pressure to "use" bailout $ they would rather hold than lend
4 - the collateral on the property renders their denial ludicrous - please see the quote from a loan officer in original post
5 - the small loss carried forward is - in effect - discriminatory. If I were retired - (net worth is > $15mm) it would not exist. If it were a C-corp instead of an S-Corp - it would not show on my personal returns.
I truly appreciate your advice. Please take a second look at this query.
I can understand your frustrations but it does not matter even if you are going back to the original lender as your current mortgage. The reason is that they have to originate the loan as new and any of the past income used has to be 2 years current. This is based on Fannie and Freddie guidleines. The bak has to adhere to these guidelines otherwise the loan will not be backed by them.
The fee that Chase charged up front is their upfront processign fee and that is for their commitment to start the loan but does not guarantee an approval. The approval is not granted until underwriting is completed.
Depending on your actual household income, you may want to talk to a local mortgage broker instead of the bank and see if their is any options for you.
The fee that Chase charged up front is their upfront processign fee and that is for their commitment to start the loan but does not guarantee an approval. The approval is not granted until underwriting is completed.
Depending on your actual household income, you may want to talk to a local mortgage broker instead of the bank and see if their is any options for you.
This is a conforming loan, so why is Freddie/Fannie backing a dealbreaker? I don't even care about the re-fi: it's a wash for me. But if the bank is making "bad faith" commitments, there aught to be plenty of others out there with similar complaints to mine. I'm guessing that this forum is a way to find enough credit-worthy taxpayers given this type of 'bait/switch' treatment for me to proceed as the the poster child (index case) of a class action lawsuit. The mood out there is ugly to start with, and these bankers have zero credability.
I am not an attorney or a real estate pro but I know the basics - if the collateral alone is 10x the size of the loan, the loan does not need to be re-insured. Any takers?
I am not an attorney or a real estate pro but I know the basics - if the collateral alone is 10x the size of the loan, the loan does not need to be re-insured. Any takers?
"bad faith" "bait and switch" "class action lawsuit" "zero credibility"
clearly, qc, you don't understand mortgage lending. honestly, nobody can expect you to understand it. after all, most loan officers don't either. what is expected, though, is that you'd understand that every loan must be underwritten, and that there are guidelines that apply for each loan. those guidelines, unfortunately, are nowhere near as forgiving as they used to be.
i don't understand what your last comment is about: "if the collateral alone is 10X the size of the loan, the loan does not need to be re-insured."
face it...every new loan is a new loan. a refinance is not a reworking of an old loan, it is a brand-new loan. circumstances in our lives change, as do the guidelines, so underwriting is required every time someone asks for a new loan. there is no "re-insuring" going on.
obviously, as i have noted in numerous other posts: "anyone can sue anyone else for any reason at any time." i highly doubt that you'll be successful in your quest to sue, but go ahead, by all means. i'm sure there'll be a complaint about the bait-and-switch tactics of lawyers who might try to undertake such a lawsuit, when all is said and done.
clearly, qc, you don't understand mortgage lending. honestly, nobody can expect you to understand it. after all, most loan officers don't either. what is expected, though, is that you'd understand that every loan must be underwritten, and that there are guidelines that apply for each loan. those guidelines, unfortunately, are nowhere near as forgiving as they used to be.
i don't understand what your last comment is about: "if the collateral alone is 10X the size of the loan, the loan does not need to be re-insured."
face it...every new loan is a new loan. a refinance is not a reworking of an old loan, it is a brand-new loan. circumstances in our lives change, as do the guidelines, so underwriting is required every time someone asks for a new loan. there is no "re-insuring" going on.
obviously, as i have noted in numerous other posts: "anyone can sue anyone else for any reason at any time." i highly doubt that you'll be successful in your quest to sue, but go ahead, by all means. i'm sure there'll be a complaint about the bait-and-switch tactics of lawyers who might try to undertake such a lawsuit, when all is said and done.
To add to what George said...
The bank is going to weigh your ability to make your payments based upon your income. You are claiming to lose $40k per year. We know the reality of how creative accounting works during tax season. It benefits you every year until you need a tax return that shows positive income to qualify for a loan.
The bottom line is that it looks like you have no ability to make your payments. You cannot make your payments with your home equity. If your loan amount is only $100k, you still need to make payments. Banks do not want to foreclose on any more properties.
On a final note, you may be better off shoping with a mortgage broker in the future. Refinancing with your current lender does not guarantee that you are going to get a better deal.
The bank is going to weigh your ability to make your payments based upon your income. You are claiming to lose $40k per year. We know the reality of how creative accounting works during tax season. It benefits you every year until you need a tax return that shows positive income to qualify for a loan.
The bottom line is that it looks like you have no ability to make your payments. You cannot make your payments with your home equity. If your loan amount is only $100k, you still need to make payments. Banks do not want to foreclose on any more properties.
On a final note, you may be better off shoping with a mortgage broker in the future. Refinancing with your current lender does not guarantee that you are going to get a better deal.
IT SEEMS THE SIMPLIEST SOLUTION IS TO REFINACE THRU ANOTHER LENDER CHASE WILL NOT CHANGE THIER MIND I CAN ASSURE YOU, THE WAY YOU STRUCTURE THE INCOME IN THE APPLICATION WOULD BE THE KEY, IN TODAYS WORLD YOU EITHER MEET THE GUIDELINES OR DONT. ID BE GLAD TO DISCUSS IF YOU CAN STRUCTURE YOUR INCOME TO AVOID PROBLEMS.
Professional Disclaimer
While I am a Mortgage Professional, this advice is generic in nature only.
DON TERRY
Professional Disclaimer
While I am a Mortgage Professional, this advice is generic in nature only.
DON TERRY