Mortgage ‘Trauma’ Center Saving People From Housing Disasters

DENVER (CBS4) – Before buying a home, many people want to make sure their finances are in order, so they ask their lender for pre-approval. Sometimes that pre-approval does not turn into a closed loan, leaving the home buyer in a lurch.

CBS4 Consumer Investigator Jodi Brooks found one Denver mortgage company that’s started a so-called “Trauma Center” in an effort to save these loans.

Fairway Mortgage lenders say they hear from frantic realtors all the time, sometimes just days from a closing date, with a mortgage in jeopardy. The problem is that the lender that pre-approved the loan now can’t get it approved.

Erin and Mark Willer were just such clients. They were moving to Denver and had pre-approval to buy a home.

“We were the ideal borrowers for any investor or any mortgage company,” Mark Willer told CBS4.

They had good credit and low debt. They were set to sign on to a FHA, 30-year, fixed interest rate mortgage for the home of their dreams.

“We got a call kinda at the 11th hour from our lender saying she wasn’t going to be able to make it happen, so that kind of threw us into shock,” Mark explained.

“It was really upsetting. It was probably one of the most stressful things I’ve had to go through,” Erin Willer added.

“It’s 100-percent wrong that the consumer and the real estate community thinks sometimes you get pre-approved but you don’t get the loan… then I don’t think you were ever approved,” said Dave Gallegoes, owner of Fairway Mortgage.

Gallegoes sees it time and again. Lenders offering pre-approvalwithout taking a thorough look at the buyers financial picture. His company has become expert at closing loans that other companies deny.

“We have to do a thorough analysis of the profile, so it’s we thoroughly analyze income, assets, employment and credit…tax returns, we see is tehre a way to do this. Did they miss something?” Gallegoes added.

In the Willer’s case, Fairway Mortgage broadened out the financial picture to include assets like 401k’s and other investments. The couple was approved for their original loan program, the FHA, 30-year, fixed interest rate.

Gallegoes advises that home buyers need to make sure their lenders are doing a thorough check on their financial picture before pre-approving them for a mortgage. The lender should be asking for:

– pay stubs

– W-2 forms

– bank statments

– tax returns

The lender should also be able to tell you your credit score and what you qualify for. If a lender doesn’t do any of that, you should not consider yourself approved for a loan.

– Written for the Web by CBS4 Special Projects Producer Libby Smith

  • Sign here

    If these folks were ideal borrowers and had plenty of assets, they wouldn’t need a FHA loan. The used a FHA loan because they had little money to put down. Possibly only 3%. They were likely short cash to close which caused the 11th hour decline. Sounds like their broker wasn’t fully aware of their financial situation. Fortunately they had additional assets and were able to purchase the home.

  • JB

    “Hello, Housing bubble? This is Fairway Mortgage. We would like to get you inflated again so that we can make more risky loans that the taxpayers will be on the hook for.”

    • Sandy

      We have 3.5% and\or we have much more to put down, the reason we went FHA was due to desire to invest in purchased property as well. FHA provides more flexibility to the Buyer, unfortunately we also got declined in the 11th hour. SHOCKING!!!!!!
      Approx. 8 years ago we went on a mission to become funancially healthy. We over came 2 huge personally traumatic obstacles but 7 years later we were debt free, we had recovered ourselves from 58K debt. In March 2010 we were told we had to wait another year by our lender due to Short sale with Citi in 2007, we were 18,000.00 short because the Bank would not accept a previous offer due to their pocessing delays. We would have been 10K down so the bank threw that part away, we sold in spite of great adversity provided to the transaction BY the bank. Ok so now we are past a year and were set to close this Friday on our new home, movers scheduled, plans being made and now the same lender from 2010 says we have to wait for 2 more years due to the short sale, this is not a Federal issue this is the BANK who also gets more flexibility because of the FHA status, wish we would have known all this a couple weeks ago. Life Changing let me tell ya.. SHOCKED in COLORADO

      • The Underwriter

        Hate to tell you this but this is a FEDERAL issue. The federal government, yes FHA, is the one insuring the FHA mortgage, thus creating the guidekines, which prevent you from qualifying. Short sales are treated like foreclosures from an underwriting criteria. What baffles me most is your disgust with the system. You had to short sale your last home and are increasing the chances of this happening again by puting only 3.5% down. You should be looking at a higher down payment so you can prevent another short sale. I’m sorry you were given poor information last year but until a mortgage transaction has closed, nothing is guaranteed, even for the best borrowers.

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