Underwriter not accepting VOR for purchasing the home we've been renting.
My husband and I have been renting/leasing a house since July of 2013. Our contract was prepared by our real estate agent and signed by all parties involved stating that our initial $1,000 deposit and half of our $650 rental payment each month would be applied to our down payment of the home. We have a simple, free checking account that does not come with checks (which has never been a big deal since we do not use checks.... Ever). We have always paid our rent in cash and have received a receipt each month. When our mortgage broker started our loan process she got all copies of the receipts and said it should be fine. The underwriter just suspended our loan due to needing verification of the rent. So our mortgage broker and our real estate agent had our landlords fill out a VOR. Now the underwriter is saying they won't accept that either and we need reports from the bank of all our ATM transactions so we can try to show where we withdrew the rent every month. The problem is we don't always withdraw the money from the ATM, occasionally husband gets a non direct deposited check, and in that case we just cash the check and use the cash that way. Is there a way around this? Why won't they accept the VOR? It's like we are being punished for paying in cash and getting receipts. Are we going to lose our house over this?! by abrooke876660 from , California. Sep 25th 2014
Demir Bracic (Bracic)
#1025 ranked lender in California - 7 contributions
This is a touchy area. When it comes to Underwriters, documentation is king. While reciepts may not be enough, deposits into the landlord's accounts may work. If you'd like me to give it a go, give me a call direct 949.27.8526 or you can email me direct at dbracic@newleaflending.com. I can get one of my underwriters to review this quickly and see if we can save from losing out on owning your home.Demir
Elva Wormley (ElvaWormley)
#817 ranked lender in California - 30 contributions
The real issue is that you're using half of what you paid in rent for your down payment. That has to be documented. Anyone can write out receipts and complete a verification of rent form. If you can come up with a down payment, ask the landlord to reduce the purchase price by the amount that you've paid in towards the purchase and that might work.
Foroogh Ghaffari (foroogh@westparkequity.com)
#1026 ranked lender in California - 7 contributions
It seems you need to search for alternative financing. I'd be happy to help you with that but I need more details about the transaction. Feel free to call me at 714-403-6948
Foroogh Ghaffari (foroogh@westparkequity.com)
#1026 ranked lender in California - 7 contributions
It seems you need to search for alternative financing. I'd be happy to help you with that but I need more detail info about the transaction. Feel free to call me at 714-403-6948
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
In the past, this has been one of the most prevalent loan fraud practices to show someone using "Lease Option and Rental Credit" as down payment.. Because of this, the underwriters will always suspect fraud when a file like this comes across their desk. Unless you can document the funds coming from your own accounts or money sources, then the underwriter has the ability to disallow those funds, and could result in a denied / suspended loan.. VOR's from landlords are almost never accepted in this scenario since they are a party to the transaction.. they are the one's selling you the home, so they have a big interest in you obtaining the necessary financing to complete the purchase.. It probably wouldn't be an issue if you were purchasing another home that wasn't a lease option, but since you are trying to use rental credits, the underwriter has an obligation to source the funds.. if you cannot prove to the underwriters satisfaction, your loan would be denied.. As Elva suggested, if you have the necessary money down without needing the rental credit, you can ask your landlord to discount the property by the amount you have already paid.. this might be your only option.. Also, depending on the loan your applying for (FHA, VA, Conventional) the down payment can be gifted in most cases, but cannot come from the party selling you the house.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com
Barb Lanis (BarbLanis)
#69 ranked lender in Illinois - 679 contributions
Follow Elva's advice. It's spot on.
Ask our community a question.
Get an answer
Related Questions
