Requiem for the Self-Employed Homebuyer

Over the past two days, I had a bitter taste of reality.  I realized just what a giant shift has occurred in the mortgage world since last year.  I have a buyer relocating to the area from out of state.  They found the perfect home for their growing family on the first visit. 

They decided to make an offer, and we competed with THREE other offers to win the day.  The home went under contract for $15,000 above the asking price!  The seller wanted a quick closing, so we agreed to get it closed by the end of this month.

The buyers were pre-approved with my preferred lender, and he felt good about getting it closed quickly.  They have 20% down and 775 FICO scores.  Yes!

Wait.  Not....so....fast.

Apparently, they haven't been self-employed long enough.

Their business is 15 months old, although they have both been in the same field for years. 

One year ago, this loan would already be approved and I would be well on my way to a tidy check.  Today, with revised Fannie Mae guidelines, it looks pretty grim. 

I have already hand-delivered the file to another lender who might be able to pull off a miracle.  Time will tell.

In my humble opinion, it's a worrisome day when buyers with ample funds AND immaculate credit have this much trouble getting a loan.  Where is the sense in that?  They have owned three previous homes with no hiccups and they have proven themselves to be worthy borrowers.  If I had the money to lend to them, I would do it in a heartbeat. 

At this point, they are expecting to pay a penalty/premium on the rate just to get their perfect home.  I would love to see it happen for them (and for me, too, truth be told).  I will know a lot more tomorrow, and I'm still hoping for the best, but preparing for whatever the outcome may be tomorrow.  (You thought I was going to say "the worst", didn't you?)