axc

Does anyone know if it is necessary to declare UK mortgages to the US mortgage lender? One broker told me no, another told me yes.

I have no debts and an excellent credit score here but have not been here long enough to be able to provide 2 years of tax returns.
My mortgage broker has declared my UK mortgages to the US lender (I have several rental properties) and they have checked them back to 2003 to prove I have never been late or missed a payment.

I am being refused a mortgage on the grounds that I have enormous debts in the UK, but they will not take UK income into account (which is way way more than the debt payments). They will not accept any non-US documents, so won't accept bank statements, tax returns etc.

Has anyone faced something similar?

lansbury

We faced something similar with Wells Fargo when we applied for a US mortgage. We were still living in the UK at the time. They took into account our UK debts and outgoings, but would not consider my salary as I didn't have a SSN.

The solution was to show my UK income covered all the UK outgoings with money to spare, and as they refused to take into account my UK income they should also disregard UK liabilities. My wife (USC) had an income sufficient to meet the requirements for the US mortgage. We didn't have a problem with them accepting UK documents in fact they were the ones who ask to see them. They did agree to grant the mortgage on her income and US outgoings and not take into consideration anything from the UK.

However my wife did have a good US credit history of many years standing. You being here only 2 years will be a problem in itself I would expect. This was in 2006 when getting a mortgage was easier than it is now.

Michael

Many lenders are currently very leery of rental properties and worry that you may lose your tenants, the tenants stop making rental payments, or that the documents are not 100% accurate and don't have a way to check. Also lenders worry if they are variable rate mortgages. However your broker should be able to find a lender that will accept your documentation as valid as long as you have a reasonable down payment on a primary residence.

Does your documentation also indicate whether you have tenants all the time and they pay on time?

sir_eccles

Definitely worth pointing out that lenders in general are much more stringent on checking sources of income and debt when underwriting mortgages these days. They want to know where that downpayment has come from (better not be another loan or credit card) they want to know about every penny of your income. Everything must now be documented.

axc

Thanks for the reply, ours is Wells Fargo too. And I have 40% to put down as a deposit.

They are happy with my current credit rating and happy with my loan amount to US income ratio.

I am happy for them to review them as I have excellent credit but their refusal to accept any UK income is crazy!

Two factors I see that made your deal easier:
- they are much more stringent on sticking within the "parameters" than they were in 2006
- your wife had more than 2 years here

axc

I can show them UK documentation but they won't accept anything other than US documentation - like a US IRS tax return.

Michael

That is very true. If the lender is not it's own underwriter and uses outside underwriters, many of those won't accept foreign documentation. Also lenders sell mortgages to other companies or wall street and now unless all the documentation is 100% as expected, it is difficult to sell the mortgage. Wall street and the rating agencies now go over the mortgage documentation with a fine tooth comb before they will get a rating on the bonds in a CDO.

Hotscot

Can't you just not tell them?

axc

I have documentation from a thrid party managing agent, and UK tax returns back to 2003. But they won't accept anything that is not from a US agency.

Plus there is at least 50% equity in every property.

I am so very frustrated.
Time to try a new broker me thinks

axc

I guess that's my real question. Did he need to tell them in the first place?

And if not, how does the fact that he already has affect me going to another lender.

sir_eccles

It also helps if you are actually sitting in an office with a person with a name rather than dealing with a call center in a different city/state talking to a different person each time. I don't know what your situation is but I know from experience it is much easier to call "Bob" locally than call some 800 number.

Michael

Worldwide income and debts are supposed to be reported and should be reported on his US tax returns. When the lender reviews his tax returns and it doesn't match with his financial statement, that would likely be automatic denial which may filter to the other lenders.

lansbury

I see you are using a broker. We dealt with Wells Fargo direct. Did it all through their online mortgage service. The direct approach where you talk to them might help. At least we were talking to the guy who was dealing with our mortgage and the underwriter, not relying on a third party to convey the information.

Michael

You may have better luck with regional banks or credit unions since some of those actually hold their own mortgages as assets instead of selling them.

captainsensible

I had the same problem with a broker but a credit union was a different proposition altogether, far less hassle and with their own underwriters and unlikely to sell the mortgage on, you will have more luck I think.