Consumer complaint received 2020-12-29
Product: Mortgage — VA mortgage
Issue: Closing on a mortgage — 
Company: Academy Mortgage Corporation (TX)

After speaking with our real estate attorneys and having them review all pertinent documents, they advised us to request to speak to the underwriting attorney immediately. At this point, we feel like we are being discriminated against and led on some kind of wild goose chase which has now left us not only homeless, but also now responsible for unexpected additional financial obligations such as storage units, additional movers for a longer period of time, and temporary rental housing ( dog friendly hotel ). 


As you saw in the email from XXXX XXXX mortgage they reviewed the divorce decree and as we expected, did in fact confirm they would not count the children as dependents which was what the VA this morning made very clear to us as well after going over everything with them and answering many questions. We have submitted a complaint to the VA regional office in XXXX and are supposed to hear back soon. However, now if we take this over to XXXX at this point when we couldve last week had we known this would still be going on, it will legally take them 9 days to close us and we then lose the house. 


Whilst reviewing some of the formal complaints with the XXXX it is evident this is not the first time Academys underwriting dept. has continually requested documents they are not entitled to but claim will be sufficient to sign off on the loan, then received what they claimed was all they needed, only to make up something new the next day, XXXX next hour at this point in our situation. I dont know how many times this underwriter just needed one last document and then we were good only to make up something totally new once we got them that information. 


I have included information here directly from the VA and included notes on each document individually but will review each since I know this is a lot. 


1. ) Predicted income for underwriting : -XXXX  has sent you the executed lease agreement on his townhome through XX/XX/XXXX for $ XXXX/month. His note is $ XXXX/month. Even with only 75 % of the rental income taken into account we are at $ XXXX/month, making this property has a {$100.00} positive monthly cashflow. 


-The XXXX XXXX  house was purchased in XX/XX/XXXX, therefore as stated below ( directly from VA ) the property was purchased in the middle of the year and therefore only shows a portion of rental income. Its a matter of being able to show proof of the propertys income POTENTIAL. Well I went one better and sent you the final XXXX P & L showing the XXXX XXXX property taking in to account all expenses including mgmt fees, monthly bills, etc. still garnered a profit of {$15000.00}. This can obviously ALL be backed by monthly statements from the rental company and bank statements for that account but I am pretty sure I already sent those or was told they didnt matter. As a matter of showing proof of the propertys income potential, if they wanted to use the same figure of 75 % of rental income vs the total note, our total payments responsible for XXXX was {$37000.00}. Our Gross total on the monthly statements is {$58000.00}, 75 % of that net rental income is XXXX, once again leaving us with a POSITIVE cash flow of {$6300.00}. 

" When is predicted rental income accepted for underwriting? 

Sometimes, rental income cant be proven via a tax return. Say, for example, youve just purchased the property, or you purchased the property in the middle of the year and only show a portion of the rental income on your tax return. 

In that case, the rental income would be considered predicted and may be used under certain circumstances for underwriting purposes. Again, its a matter of being able to show proof of the propertys income potential. 

If the renter has a tenant, lenders will take a percentage of the income thats outlined on a lease and use that to determine projected rental income. They usually use 75 % of your total reported income 25 % is subtracted to account for potential vacancies and ongoing maintenance. '' 2. ) Debts and Obligations : This ties into # 1 as well. The lender may disregard the payments on the outstanding mortgage ( s ) and any consumer obligations which the veteran intends to clear if available information provides a reasonable basis for concluding the equity to be realized from the sale will be sufficient for this purpose.

The underwriter is definitely not taking this into account. You have all documentation from XXXX XX/XX/XXXX showing the refi out of the hard money was approved and set at a rate of 2.75 % back in XXXX before we halted the refi to get this deal done. That re-fi which the veteran clearly intends to clear backed with available information, would make the XXXX  home payment in escrow roughly XXXX/month. Again take 75 % of our current rental agreement which shows monthly rent at {$2400.00} through XX/XX/XXXX and you get {$1800.00} and AGAIN we are in a positive monthly cash flow. 


3. ) Exceptions for considering all members of the Household : This one is so black and white ( literally as stated not only in the divorce decree, but also in an email from XXXX backing that since apparently a legally binding document wasinsufficient for the underwriter which is also super inappropriate for him to even ask for ). This one is REALLY makes us feel discriminated against, since it clearly states the lender may omit any individuals from family size who are fully supported from a source of verified income which, for whatever reason, is not included in effective income in the loan analysis. Examples : A child for whom sufficient foster care payments or child support is received regularly. Again, reinforcing what we were told this morning from the national VAs office who suggest we file a report with the regional office. 


4. ) Compensating Factors : These factors are especially important when reviewing loans which are marginal with respect to residual income ( since he wants to use all aforementioned against us to factor insufficient residual income ) or DTI ratio. Significant liquid assets may compensate for a residual income shortfall include but are not limited to : See document for all underlined and notes emphasizing another reason we feel as though this underwriter is not at all taking this into consideration. 


We asked several times if more cash or proof of more liquid assets or increasing down payment ( even though we are already over 20 % which is crazy ) and were told to not even bother sending proof of any of that because it didnt matter. The VA is in direct disagreement with that statement and in addition to those things we asked about we meet many other of these factors that should be taken into consideration as well. The fact there are assets that could be liquidated ( half already are sitting in cash ) for over XXXX is mind blowing enough, then factor in excellent credit history for both parties, long term employment ( XXXX 19 years working for XXXX ) satisfactory home ownership, etc. 


It is clear this underwriter does not care at all about the VA guidelines set forth to aid those who have served our country, and it is recognized by us and the attorneys we have spoken to as both discriminatory and disrespectful.