Our house is currently under contract and we have a house that we plan on moving to under contract.

Our buyer is a widow who is a successful realtor in this area(Lake Travis) who is the beneficiary of a trust that her late husband left her that pays out monthly.

We were supposed to close on the sale of our home this coming Monday but found out late Wednesday that she was denied her loan because her lender wouldn't count the trust income as income.

My question is how common is this? Is this going to be a problem with all lenders or is it just the result of a finicky lender?

We're sitting here with the house packed, kids taken out of their preschool, and the wife has a start date for her new job in another town. Are we screwed?

Who is her mortgage company?

I can't answer your post without a detailed review of the file specifically the income documentation. I can check if something changed but if you can show the trust can pay 3 years or more it could be counted. Also if she has a successful RE business there should be income from that as well.

One statement I know I can make is her income should of been thoroughly reviewed before she even made an offer. That is on her mortgage guy. And there is alternative lenders who could do asset based loans.

Not sure who her original lender was going to be but according to my realtor she had a pre-approval letter from her lender. The time from offer acceptance to closing was a month and a half. Shouldn't we have known something was amiss a long time ago? According to her, her lender had been telling her all along that everything was good only to suddenly switch at the last second. She's now working with UFCU and another lender whom I do not know to try and get everything straightened out and they're supposed to let us know yea or nay tomorrow.

We can issue pre-approvals without documenting income. It's common. In this situation and all self employeds I get income docs before issuing the approval. Not all do but I learned that lesson the hard way. Self employeds always over estimate their incom compared to what a lender will accept.

But still this should of been known no later then two weeks after contract. Her mortgage guy screwed up.

How much is she looking to borrow? is it over or under 453,100? If below, it is very cut and dry. She either meets the requirements or she does not. Below are the requirements:

"Confirm the trust income by obtaining a copy of the trust agreement or the trustee's statement confirming the amount, frequency, and duration of payments.


Verify that the trust income will continue for at least three years from the date of the mortgage application."

Source: https://www.fanniemae.com/content/guide/selling/b3/3.1/09.html#Trust.20Income

If she is looking to borrow over 453,100 it would NOT be a Fannie deal so would depend on the program guidelines itself. But, either way LO should have done the work up front.

If it does not work out with the current lenders she is talking to I would love a chance to speak with her. If she is well qualified other then quirky income we can often make deals work and very quick (as in close on the 8 day on homestead, the soonest allowed by law.) When we lend our our money as we would in this case, we can make "common sense" underwriting decisions that might fall through the cracks on other programs.

Thanks guys. It's definitey under 453,xxx. Supposedly we should hear back tomorrow and go from there. Just hoping to move and get settled before Christmas but time seems to be running thin.