Home Mortgage Refi on the Fritz

by Renee from Murfreesboro, TN

Ask Kate why a home mortgage refi goes on the fritz: Hi Kate, We closed on our home this past Monday. The refinance was supposed to fund on Friday. But the loan "specialist" tells me it can't fund because our loan file had been pulled for a random quality control audit. The audit came back stating that they need more proof of my disability income. Can they do this?

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Renee continues... But I have provided all I could and it went through the underwriters with no problem.

Next they said, "Your AMEX account was omitted from your liabilities (debts) even though a balance still shows being carried on it."

Normally for AMEX, we supply 2 months bank statements to show sufficient assets that cover the entire balance. However they never requested this.

"I do see a bank statement in file that you previously sent but it was never reviewed by the underwriter as they didn’t need it and the January statement shows the balance at $5,116 which wouldn’t cover the whole AMEX Card but it appears that you may have additional accounts that we just don’t have the statements on?"

"If so, could you provide the last 2 months complete bank statements that would sufficiently cover the $14k AMEX account?"

Our AMEX is on a revolving account and we pay a monthly payment which shows on the Uniform Application. Is this legal?

Kate Answers: Home Mortgage Refi on the Fritz

***zz-portrait-left.shtml*** Dear Renee,

When borrowers are treated like this, I get steamed.

Mortgages often get pulled for post-funding quality control (QC) audits.

But underwriting of the borrower takes place before funding.

In other words, QC audits review the lender. But seldom would companies plan to hold up funding for such an audit.

In fact, because of the inconvenience to a borrower after funding, some mortgage companies know if they offer a couple of dollars when requesting missing documentation, the homeowner will be more motivated to cooperate!

Requirements for refinancing a home mortgage should be more transparent but...

In this case, I think they are pulling out a fancy term to cover up that:
  1. Their lines of credit are full so they need to delay funding your loan.

  2. They found another investor who is paying more for your loan but has different documentation requirements.

  3. Or something as simple as their computer system temporarily went down.

Don't cut off your nose to spite your home mortgage refi...

Arguing with the lender puts your refinance transaction in jeopardy. But say you decided to dig in your heels and insist they fund your mortgage as-is. What could happen?

It might not be pretty. Your pay stubs and other loan documentation could expire as well as your official loan documents. You could end up going past your mortgage interest rate lock expiration date.

Or worst yet, lose your mortgage refinance approval altogether.

So I urge you not to go to battle over this. Cooperate as best possible. Promptly give them whatever they ask for. Explain inconsistencies before they have a chance to question them.

Make sure any copies are legible and complete. For instance, if your bank statements are numbered 1 to 4, supply all 4 pages, even if you think the last page offers no pertinent data.

Vote with your feet the next time you get a mortgage.

Voting with your feet is one of the best ways a homeowner can protest a lender's poor customer service. Next time you refinance or need a new loan to buy a home, choose a different mortgage company.

It's YOUR home and YOUR mortgage. You deserve the best!

Good luck and best wishes,

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