Need FHA loan help

[sactoking]

I'm in need of ATOT's vast knowledge to help me unscrew the giant dildo Quicken Loans shoved up my butt.

I have an FHA loan on my house which I am not only current on, but I am ahead in payments on. My rate is currently 5.75% and I'd like to refinance because rates are ~4%. The FHA has their streamline refinance program that requires no appraisal, no employment verification, no income verification, and no credit check.

I submitted an FHA streamline refinance application through Quicken Loans. As part of their underwriting they pulled a credit report and income verification. My wife worked at a commission-based job (~50% of her income was commission) that she had held for 2+ years. Quicken arbitrarily and capriciously discounted her commission income to zero and then said our debt:income was too high and denied the loan. They then reported the denial to FHA for debt:income ratio. This is in spite of the fact that debt:income was Quicken's own requirement and not an FHA requirement.

I sent in an application to a new lender who did not check credit, income, or employment. When they submitted the loan to FHA for final approval they got a notice back that Quicken had already denied based on debt:income so the new lender had to deny as well. I contacted Quicken and they said that FHA guidelines require they report the declination even though it is not an FHA standard and that they cannot remove it from the record.

So I'm stuck where I can't find a lender that can process an FHA streamline for me because my debt:income was too high even though that's not an FHA factor. This is all because Quicken used it as their own internal requirement.

Does anyone know a lender that will work with me? Is what I'm being told by Quicken and the other lender true? Since Quicken's declination of an FHA streamline was not based on FHA standards and now I'm stuck either with no refi and/or with a higher rate do I have legal recourse against them for the lost benefit of the refi?

This whole thing is asinine because the FHA guarantees the loan 100% so there is no risk to the lender and forcing us to stay in the original loan makes it more risky, not less.

 

[FallenHero]

Since its being denied at the source, FHA, you might very well be screwed for awhile. At what point does FHA reset their facts or remove that denial from your record? You may have to appeal directly to them and submit that your income wasn't as reported by quicken with a corrected debt:income ratio calculation.

 

[sactoking]

Since its being denied at the source, FHA, you might very well be screwed for awhile. At what point does FHA reset their facts or remove that denial from your record? You may have to appeal directly to them and submit that your income wasn't as reported by quicken with a corrected debt:income ratio calculation.

I don't think it's being denied by FHA.

It's my understanding that the Quicken processor submitted it their underwriter as a cash-out refi instead of a streamline. The underwriter denied the cash-out refi based on debt:income even though that shouldn't have been considered. The underwriter then reported the declination to FHA.

Now when a lender tries to pull the case number for a (proper) streamline the FHA reports that there was already a declination on the borrowers. That's the Quicken declination, which never should have happened. The new lenders won't lend because they can't securitize it with the denial on the record, even though it is less risky, 100% insured by the FHA, and the denial was wrong to begin with.

Quicken says they can't remove the denial from the record, either.

 

[boomhower]

You need to contact FHA and get the Quicken screw up unscrewed. It's general policy that once your at 2 years of history commission is OK to count. Because Quicken screwed that up shouldn't penalize you. Quicken loans sucks, never use them.

 

[sactoking]

I can't get a hold of anyone at FHA that knows anything. They are like 1st level tech support, reading out of manuals and whatnot.

 

[CADsortaGUY]

I can't get a hold of anyone at FHA that knows anything. They are like 1st level tech support, reading out of manuals and whatnot.

Find a local bank that will do the work for you. The mega processors like quicken and others won't help most likely but a smaller bank might. They'll just sell the note anyway but they usually know people higher up the chain and can skip the 1st level "support" people.