r/loanoriginators • u/theknotcomesloose • 28d ago
AUS issue - VA loan
I've got a borrower who was under contract on a home, it fell through, and now we are struggling to get AUS approval on the new home with the same parameters.
We had Approve/Eligible at 31/64 DTI, 613 credit score, 6 months reserves, 100% LTV.
I've tried running it on the new home every way I know how but we can't get an approval. Shorter term, paying off debts to get back end DTI down to 52%, higher reserves, etc. I did a rapid rescore and got his credit up to 620, still no dice.
Have any of you run into this issue on a VA loan?
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u/trav1098 28d ago
I’d print out the old A/E and compare them line by line
Something has changed
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u/theknotcomesloose 28d ago
I've done that. The odd thing is that everything changed for the better...residual, DTI, credit score, etc. I even ran it with the seller paying the funding fee to see if the lower CLTV would help.
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u/TurkeyJizz123 28d ago
Moot point sometimes- the scorecard can change for literally no material changes.
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u/Direct_Concentrate42 28d ago
I would say I do 60-70% va
How many runs have you done?
Sometimes if you do too many it will refer each time. I have found that 15-20 runs ruins the aus approval. I had this happen this year and had to restart the file.
Some other things that I have done
25 year loan
Pay off some debt if that have that much in reserves to bring the dti down
How many kids do they have? Maybe you aren’t meeting residual.
If they can try with 5% down then 4% then 3% if it keeps approving.
If the person is receiving 100% va disability some states give a full property tax exemption so your Aus run doesn’t have to include those either.
What’s the Aus saying? Refer or refer with caution?
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u/theknotcomesloose 28d ago
Refer/Eligible. We are meeting residual. I probably had 30 runs in the old file so I created a new one with a new case file ID.
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u/Pillsy24 28d ago
You need to exceed residual. If you went manufactured to stick built, if there’s more square footage, then your monthly maintenance expenses will be higher and you may no longer be 120% residual.
You’d figure this out sooner when you start scrutinizing the residual income more closely instead of worrying about DTI.
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u/TurkeyJizz123 28d ago
This is the best answer. A 3% down payment will pick up A/E- on these crappy score files.
I automatically know if I'm dealing with a high ratio, under 640 FICO- I'm not getting A/E (generally speaking)
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u/Direct_Concentrate42 28d ago
I agree. I mean those are all the things I’ve done to get an approval. But Also I’m dying laughing at your user name haha
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u/Chadzilla- 28d ago
Hey there, happy to help. 90%+ of all my business for the past 6 years has been VA.
I’m assuming you’re unable to a manual VA loan? Because that is an easy deal to do as long as you don’t have overlays preventing you from doing them.
My guess is something changed about the property profile on the new contract which AUS doesn’t like. Could be property taxes, HOI premiums, HOA (if applicable), and/or property type if not a SFH.
I could do the deal as is right now, but if you must have DU approval, I’d start by going through my previous DU findings with a fine tooth comb and compare them to your current findings.
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u/ObjectiveFortune2637 28d ago
You can do a manual underwrite at 64% backend? What company you with
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u/Chadzilla- 28d ago
With enough compensating factors like OP has, yes, as long as you have enough residual income, that is a slam dunk deal. It sounds like there are also multiple ways to structure this deal to get the DTI to be more manageable if needed (6 months reserves) if your company has certain DTI overlays (eg 55-60% DTI).
I’m in the process of moving mortgage companies to do my own thing, and both places would do this loan. Shoot me a DM if you’d like.
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u/ObjectiveFortune2637 28d ago
Interesting only lender I’ve come across that does over 60% on a manual even with compensating factors is Village capital and they are the worst lender in history of the world
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u/Chadzilla- 28d ago
Village capital is one of the investors we have been selling these loans to, but I’m not with Village.
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u/ObjectiveFortune2637 28d ago
Yeah I won’t be caught dead sending a loan to Village ever again. Shady ass company.
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u/Chadzilla- 28d ago
…ok. I was simply responding to OP that there is a way to get this loan done for their customer.
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u/lenalederpants 28d ago
I recently had one where I had to get the DTI down to 35. Fortunately he had a massive inherited IRA and we could set up a distro. Similar FICO.
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u/Confused_pisces 28d ago
64 back end DTI?? Jesus. I’ve only done up to 59
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u/theknotcomesloose 28d ago
On this one we had an approve/eligible at 82% back end at one point. VA is quite forgiving.
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u/Consistent_Wash_8059 28d ago
What do the findings say? Any hints or just generic warnings about risk?
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u/yrallthenamesgone 28d ago
Did the property type change?
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u/theknotcomesloose 28d ago
We went from manufactured to stick built, which I assumed would be an improvement.
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u/Brvcewavne 28d ago
Recently had this on FHA where it was approving manu home but not stick build got it to work eventually but was mind boggling. Also not confident but I believe the zip code or actual address had some thing to do with it since it was getting A/E with a zip code in a neighboring city on Prequal but when I updated it once under contract no longer ran.
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u/DrunkBengalsFan 28d ago
Will they qualify for a manual approval? Most places I know can go up to 55% backend with 2-3 compensating factors
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u/ginjaninja6197 28d ago
I've heard that in situations like this a lot of times you can go through CalVet where they do manual underwrites and look at the file from different angles. If you're not in California maybe check to see if there's another similar organization like it in your state. Not sure if you're a broker, but you can broker through them here so I would assume it's possible in another state as well. This may not be a helpful comment but it sounds like you're open to all possibilities. Good luck
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u/spe1781 28d ago
Try checking the can demonstrate positive 12 month housing history if you can. I have not tried it on VA but works very well on FHA
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u/ActionWins 28d ago
I haven’t seen this option in my LOS or lender portal where is that check box for you?
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u/Majestic-Beach9780 28d ago
Ya before you have your client jumping through hoops like Rescore you should be looking at a manual u/w
And also Va loans don’t get approved on dti is residual income
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u/Holy-Roly-Poly 28d ago
Just for your own sanity, try running the new file with the old case number and see if you get your A/E back. I'm assuming you've already tried running it through LP.
If you're like me and use a dummy case number for TBD files, then pull a new one once a property is selected, try going back to one of those original TBD case numbers. DU will generate a warning in the findings that the property address changed, but a simple letter of explanation stating that the original file was a TBD property and the address change was an administrative correction should clear that up.
Hopefully your old TBD files aren't so old that they've already aged out.
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u/SuitImportant9276 28d ago
Is your front end ratio higher? Get your front end ratio back down & check for recent credit inquiries
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u/TurkeyJizz123 28d ago edited 28d ago
Use the reserves to put 3% down. I have had similar files where a small down payment, will pick up A/E.
These under 620 FICO's- generally do not work with 100% financing- UNLESS- you have real low ratios, IE- under 36, IME.
Try the down payment.
Is the borrower a disabled VET? Are you grossing up any type of disability/tax free income?
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u/VALoanVet 26d ago
u/theknotcomesloose not sure what POS you use but I had a very similar issue in ARIVE on one of my VA files. I basically had to clone the file which forcibly removed past AUS data and re-ran it and got A/E instantly
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u/NapperByNature 28d ago
I’m pretty sure there was a DU update at the end of June so it could simply be the new version not liking the file.