Changing jobs mars purchase

Posted: August 01, 2010

Another mortgage story, with lessons learned, courtesy of reader John Sapovits:

A lifelong Philadelphia-area resident, Sapovits, an acute-care nurse-practitioner, decided to take a job with an Upstate New York health-care provider. Dissuaded from renting there and owning his house here free and clear, he began looking for a new place.

He had good credit, didn't need to sell his house to buy another, and had 20 percent to put down - Sapovits thought he was all set. He was preapproved for a mortgage and found a lender at LendingTree.com.

He and an agent looked at houses. He made an offer, then negotiated a price of $190,000, which meant he'd need a $152,000 loan.

Warned about trying to get a mortgage in between jobs, Sapovits planned to stay with his Philadelphia employer until early July, so he tried to arrange settlement on the New York house in late June. The seller had some health issues, though, delaying closing until July 20.

With a date set, Sapovits e-mailed the lender, but received no response. The loan officer he dealt with contacted Sapovits, said he was with a new lender, and asked if he was willing to move, too.

Too many red flags were attached to the new lender, so Sapovits asked his agent to recommend someone who was familiar with the market. "I had concerns about some of the Internet lenders and their ability to close the deal when they were not local."

He was quickly approved for a mortgage. The loan officer noted that his new employer, with whom he would start Aug. 16, would be supplying employment verification when his credentials were completed in July.

When the lender, Wells Fargo, sent a letter approving his mortgage, it required 30 days' worth of pay stubs from the new employer. But the loan officer said the last two stubs from his Philadelphia employer would be enough.

Sapovits' new employer provided a letter from the chief executive officer and other information Wells Fargo required.

Instead, the lender wanted a "fully executable nonbinding employment contract." During the real estate boom, the letter would have been enough, but no longer.

It would take a while to obtain a contract, and Sapovits had to delay his move and the settlement date.

He tried to appeal the letter's rejection as proof of employment, but after finally reaching the loan officer after some delay, he was told even the contract might not be sufficient.

He talked to a director of operations at Wells Fargo, who insisted the pay stubs from his current employer or a contract signed by his new one were necessary. She also added that he would need 30 days of pay stubs from his new employer.

That would have pushed things to October, and the issues already had delayed the closing and affected transactions involving his sellers and the people from whom they were buying.

Wells Fargo suggested that he look for a loan that would remain in the lender's portfolio, offering refunds for the appraisal and credit report. In the end, his parents secured a home-equity loan to help him buy the house.

The lessons Sapovits learned, and his advice for the rest of us:

Be sure the lender is aware of your particular situation.

Logic is not always found in rules and requirements.

Be sure whom you are dealing with.

Consider unconventional methods of financing. His parents backed him, but he was offered a private mortgage by one of their neighbors at 5 percent interest.

He also was prepared to ask the sellers "to rent to me until I qualified for the original mortgage, and I would rent from them while also paying the costs of a bridge loan they secured (to buy their other home) until my mortgage was finalized."


Inquirer real estate writer Alan J. Heavens is the author of "Remodeling on the Money" (Kaplan Publishing). His home improvement column appears Fridays in Home & Design. Contact Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com.

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