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The joy of finding another place to buy in such short order—after three days of searching and looking at fewer than 10 apartments—was not tempered by writing a big check (10% down) at my contract signing. The prospect, however, of pulling together another co-op board application was daunting, as was the process of updating all my financials for Wells Fargo.
Mary, my loan coordinator, assured me it would go faster this time, and within a week, sent me the list of materials she required. I set to work assembling new bank statements, the IRS income verification forms, letters explaining credit inquiries and copies of paychecks. I also set about refreshing my letters of recommendation for the co-op board.
The new co-op application was 35 pages long, about one-third were separator or index pages that I had to customize, clarifying multiple bank accounts or detailing the types of documents I included.
The application was a read-only PDF, which I painstakingly recreated in Microsoft Word, faithfully duplicating the charts, fonts and formatting. I recalled my early-morning collation hell with Karen, my previous broker: the crooked tabs, pages punched on the wrong side flashing before my eyes. OK, so this time, I’d be a little anal, but I wasn’t going to take any chances of rejection.
The clock was ticking especially fast for two reasons: one, I wanted a full commitment letter from my lender before 2012 taxes were due, requiring me to report a higher income—a condition that, in 2011, cost me a few extra thousand in taxes.
And second, my lease in Astoria was up on May 31, and my landlord of eight years, claiming I was “harboring” my beau’s dog, declined to renew it. I knew I could fight it—nothing in my lease prevented me from having a canine visitor, and in fact, many residents in my complex actually owned dogs—but I didn’t have the energy for yet another time- and paper-intensive project. I hoped that by closing in May I could avoid a legal confrontation, even if I knew I could win.
The mortgage contingency on my contract expired on March 24. Weekly calls and e-mails to Mary at Wells Fargo produced a steady stream of assurances, the last dated on March 18 with a promise of a commitment letter by March 22. On the 21st, Mary called with a problem.
The bank’s lending parameters had changed and now required a review of two year’s income. When the underwriters averaged 2010 and 2011, I fell below the debt-to-income-ratio required for the apartment.
I was enroute to an assignment, but sent her an email from my phone:
What is the income requirement & the ratio they're now seeking? Depending on that, I might be able to either put more money down or get my 2012 taxes done, which will show a higher income than 2010.
I still have the GFE [good faith estimate] from the last loan. With a lower purchase price and a lower interest rate, it's hard for me to believe my mortgage payment is now higher than the amount for which I was previously approved.
It's inconceivable this can't go through! But I know you're here to help so I look forward to your update. Thanks.
After two days of radio silence, during which my attorney was frantically negotiating an extension and Sidney, my broker, was preparing to leave on a two-week vacation, I heard from Mary. The underwriters refused to consider 2011 as a stand-alone year, and it was too late to consider my 2012 income because the “acceptable” IRS verification would take four to six months. No seller in her right mind would honor a contract that long (this coming from a buyer who held out for year hoping a bogus contract would right itself).
My alternative: bring down the debt-to-income ratio by putting down $140,000--on an apartment listed for $249,000.
It took me about 24 hours to create my own five stages of grief and denial: I tried demanding (“You promised me!”) and logic (“You should have grandfathered me because your rules changed two months after we restarted the process”). I tried whining (“I have nowhere to go!”) and then anger (“How could you do this to me?”). And finally, remorse (“Why, oh, why did I send her those Jacques Torres chocolates at Christmas?!”)
And it took me no time to understand there’s little reasoning with a big bank. And so at my attorney’s request I demanded (well, OK, he said to ask, but all niceties were out the window as far as I was concerned) a declination letter and broke up with Mary and Wells Fargo.
Sidney called on the eve of his vacation and uttered two words: mortgage broker. I thought of used car salesmen and pawnbrokers—dealers on the shady side. Was I damaged goods?
I hung up the phone and checked my e-mail. Ironically, right on time was the declination letter from Wells Fargo. No apology, no heartfelt Midwestern condolences like last time.
I unscrewed the cap of my go-to emergency wine (because who can bother with a corkscrew in times like this?), took a swig out of the bottle, considered my options:
- Break up with boyfriend and dog, beg landlord for lease renewal.
- Pack it in and move to New England and take care of ill mother, the fact that I am not a nurse and I hate bodily fluids notwithstanding.
- Pack it in and move to Portugal, the fact that I don’t speak Portuguese and have no work permit notwithstanding.
- Call the mortgage broker.
Sidney pinged me with the contact information for the broker. I took a long swig and picked up the phone.
Next up: Master of my domain.
Elle Bee is a lifelong renter currently in the process of buying a Brooklyn apartment, recounted in her bi-weekly column, Diary of a First-Time Buyer.