Steps to Take if Your Mortgage Application is
If your mortgage is
denied, the lender must give you specific reasons
why or tell you of your right to ask for them.
Under the law, you have the right to:
Know within 30 days of
the date of your completed application whether
your mortgage loan is approved. The lender must
make a reasonable effort to obtain all necessary
information, such as credit reports and property
appraisals. If your application is rejected, the
lender must tell you in writing.
Know specifically why
your application was rejected. The lender must
tell you the specific reason for the rejection
or your right to learn the reason if you ask within
60 days. An acceptable response might be: "your
income was too low" or "you havenít been employed
long enough." A response of "you didnít meet our
minimum standards" is not specific enough.
Learn the specific reason
why you were offered less favorable terms than
you applied for, but only if you reject these
terms. For example, if the lender offered you
a smaller mortgage or a higher interest rate,
you have the right to know why if you did not
accept the lenderís counter offer.
Find out what is in your
credit report. The lender may have rejected your
application because of negative information in
your credit report. If so, the lender must tell
you this and give you the name, address, and phone
number of the credit bureau. You can get a free
copy of that report from the credit bureau if
you request it within 60 days. Otherwise, the
credit bureau can charge up to $8.
If your report contains
inaccurate information, the credit bureau is required
to investigate items that you dispute. Those companies
furnishing inaccurate information to the credit
bureaus also must reinvestigate items that you
dispute. If you still dispute the credit bureauís
account after a reinvestigation, you can include
your summary of the problem in your credit report.
Get a copy of the property
appraisal from the lender. Mortgage applications
may be turned down because of poor appraisals.
Review the appraisal. Check that it contains accurate
information and determine whether the appraiser
considered illegal factors, such as the racial
composition of the neighborhood.