Loan Denial because not having friends
NO LOAN IS
I had a client, non-U.S. born but U.S. citizen, who had moved from
California to Dallas area from his job. He had great income,
professional management position and great credit score. He got
qualified and purchased his dream home, however, at closing the
title company put a form in front of him to write down names, phone
numbers and addresses of two family members, relatives, friends that
they know him but don’t live with him. His family and relatives were all
living outside of the U.S. and he knew a few coworkers living in California but
did not know their addresses, etc. He signed all other papers,
except that page. we left the title company. Seller supposed to come
after us and sign
their papers, then lender fund and we get notify of closing and get the key.
Two hours later, the title company called me and said if my client
doesn’t come up with two names and addresses, the lender will not
transfer the fund and we will not have closing.
I got really upset and I don’t think the lender’s request was
legitimate. So, if a well qualified U.S. Citizen doesn’t have
family, relative or friend to list he will be denied of getting
loan? Mortgage lenders should not lend money based on the
applicant’s friend names and addresses.
I explained the situation to my client, but he agreed that we both
go back to the title company and he put information about two new
guys from his new job (with their permissions) in the form and we
closed the deal.
I know the intention of the lender: they want to be able to
reach/find the borrower if he disappears! However, just putting some
peoples address or phone number do not obligate other non-involved
with the loan to reveal information to lender if they don't want to.
Currently, I know this is a VA rule, but still I don't agree with
To the mortgage lenders, a person's credit score represents his/her
likelihood of making on-time mortgage payments for the next couple
of years, based on the person’s recent (e.g., last two years or so)
Therefore, it is very important to have a good/excellent credit
history and credit score. But having a friend or not, should not
affect the applicant’s ability to pay. The mortgage lender should
not approve or disapprove clients based on whether or not applicant
has family, relatives and friends.
Is that legal? Should we reveal the name of the
lender? What do you think?