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Mortgage Loan Denied

Forgive me, as I write this post through a cake fueled haze. I’m an emotional eater. And today, well it has been an emotional rollercoaster. Where to begin? Today I was informed via email that my HSBC mortgage loan application was being denied. According to my loan officer, she was appealing that decision. Several minutes later I received a convoluted email about an unreimbursed employment expense on my 2012 tax return which would significantly decrease my income for 2012. What? I called the loan officer for an explanation.

In 2010, I attended graduate school, trying to advance my career in my field. I worked fulltime and was on a three year part-time graduate school track.  I paid for the first year of school mostly out of my own savings and bi-weekly paychecks. It was a struggle. In the second year of grad school, I applied for and received a federal student loan. However the loan did not completely cover the full cost of my tuition and last year I spent $16,000 of my own hard earned cash to pay for a year’s worth of classes. Like I said, it was a struggle but I was determined to complete my degree.  The underwriter deducted this expense from my gross annual income, and responded that I wouldn’t be able to make the monthly payments on the loan. Now it appeared to me, that HSBC was penalizing me for being too efficient, too careful with money. I paid off a debt and it’s being used against me? I explained to the loan officer that the $16,000 was part of a onetime tuition payment and I’m no longer in school after graduating earlier this year and therefore does not have that expense this year. Her response was, it doesn’t matter and that I should send an email to her explaining what I had stated on the telephone, though she doubts that the loan will be approve. She will forward my response to the underwriter. It goes without saying, but I was extremely angry about this and immediately wanted to close my current account with HSBC.  Where do I go from here? I finally found a coop and it appeared that it was slipping through my fingers.
I called my attorney, and he was very supportive. He stated that it was a BS excuse and the truth was that HSBC did not or does not want to approve loans for coops; therefore they find many excuses to deny the loan. He reminded me that they have had the application for almost 90 days before coming to this conclusion. He asked me if I wanted to continue with the property and I was ecstatic that there were still options available to me. He gave me the contact information for another mortgage loan company and I immediately contacted the loan officer. I explained the situation to him and now he is reviewing my papers.
I called my realtor and she reiterated what the attorney said. HSBC needed a reason to deny me that loan because I’m buying a cooperative and not a house.
I’m still feeling a bit raw, right now. Still on edge. Still angry. I have wasted three months with a bank, who tried every reason possible to deny me a home loan. It’s hard not to take it personally and it’s easy to blame the underwriter for the difficulty. But I put the blame squarely on HSBC. Their mortgage loan process leaves a lot to be desired.
One of my coworker is going to closing on her 4th home later this month. This coworker has had a property that was foreclosed several years ago and a large amount of student loan debt, yet she was approved for a mortgage. Me, I have no liens, no foreclosures, a comparatively small student loan, yet I get penalize for paying my bills. I don’t get it.
If anyone else has had a similar experience, please share.  

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