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beths · Apr 18, 2008, 08:06 AM

My husband and I applied for a FHA mortgage. We received an official approval letter stating the amount we were approved for and informing us we were good to go, outside of the necessary insurance requirements at closing. We have been house hunting and out of nowhere we receive a call that states we are denied. They have yet to produce a reason as to why they issued a denial after the official approval, especially since there has not been a change to our credit, purchases, etc. since the loan was initially approved. Can we pursue this problem with the mortgage company to result in the approval standing? Can anything, legally, be done?

ashley0716 · Apr 18, 2008, 08:41 AM

Legally, no there isn't anything you can do. Mortgage lenders have the authority and discretions to deny anyone, and they don't have to have a reason. With today's market for real estate, it's a great time to buy, not a good time to finance. So many lenders are in trouble for all the foreclosures they have that they are really sticking to some strict guidelines with borrowing. I don't know who your lender is, but I would reapply with another one. I know it's frustrating, we had to change lenders 3 times just to get our VA loan approved! And it may not be anything to do with your credit or you as a borrower, they can deny you because of the property you chose. Good luck!

JudyKayTee · Apr 18, 2008, 09:49 AM

Originally Posted by beths

My husband and I applied for a FHA mortgage. We received an official approval letter stating the amount we were approved for and informing us we were good to go, outside of the necessary insurance requirements at closing. We have been house hunting and out of nowhere we receive a call that states we are denied. They have yet to produce a reason as to why they issued a denial after the official approval, especially since there has not been a change to our credit, purchases, etc. since the loan was initially approved. Can we pursue this problem with the mortgage company to result in the approval standing?? Can anything, legally, be done??

No, it is within their rights - they can deny at any time up until closing. The basic requirements may have changed and you no longer qualify - or they are pulling out of your area or are out of money or... who knows? Banks do this, also.

Try another lending institution or simply call them and ask.

I've seen denials literally at the closing table - it happened to my sister. She was approved at a certain percentage, the day before closing was notified the bank wanted something like 1% more, what did she want to do? She took the 1% more. (She was not approved at a floating rate but apparently the guidelines had changed.)

I did the closing and when your sister is screeching in outrage it gets a little dicey.