I-551 and mortgages

[Mark UK 3]

Dear all,

We're in the process of closing on a house (after a long, long search) and we're into the last week of the process now.

The underwriters for the mortgage company are asking for an I-551 stamp in my passport stating my application for permanent residence is pending.

I do not have such a thing: I have my K1 visa, my I-94, my EAD and my receipt of application for my permanent residency.

I've looked on CIS and it seems to be for when you've gone for an interview and have had your GC application approved pending a namecheck or something, though I'm not 100% sure.

What is the I-551? Should I require it in my circumstance or is it something out-of-date that they're referring to?

Many thanks in advance,

Mark

[perfect 39]

The I-551 is indeed the Permanent Residency stamp you get with the approved Green Card application (generally you get it at the interview if approved).

We found when we did a refi that to be a named co-borrower I had to be either a USC or a Permanent resident, so you may come into some difficulties if you are looking to co-borrow.

However, if it's just to get your name on the deed of the house you can do this with a quit claim deed - I think we did an inter-spousal deed which then named me as co-owner of the house even though at that time I wasn't named as a co-borower on the mortgage. When I became a PR and we refinanced to get a lower mortgage payment I was a PR and therefore could be named as co-borrower.

May or may not depend on the company but I think the PR requirement is pretty standard now.

[YuAndDan 153]

I-551 is another name for Green-Card, you would have a stamp like that only if you have permanent resident status, the Case Officer may stamp your passport with it if they approve the green-card, or in the case of a person entering the country on an immigrant visa like CR-1 or IR-1 the POE officer usually stamps the passport to indicate the Green-Card.

[rebeccajo 14]

May or may not depend on the company but I think the PR requirement is pretty standard now.

Another old wives tale.

Yes it may depend on the company BUT if they are using permanent residency as a pre-requisite to making you a loan, that's flat discrimination.

Tell them to call their underwriter and if necessary insist the underwriter research the FNMA regs. Tell them to research 'non-permanent resident alien'.

Edited March 21, 2007 by rebeccajo

[meauxna 15]

What is the I-551? Should I require it in my circumstance or is it something out-of-date that they're referring to?

It's evidence of Permanent Resident status; you're not a PR yet. An I-551 stamp would not show your status as PR was pending.. you can't get one until you are a PR.

Did you at any point claim to be a PR to the lender, or did your mortgage broker decide that you were one (they sometimes do). Do what 'becca suggests. They can not deny you the loan, but they may not offer you the same terms. Is your income part of this loan?

[Mark UK 3]

What is the I-551? Should I require it in my circumstance or is it something out-of-date that they're referring to?

It's evidence of Permanent Resident status; you're not a PR yet. An I-551 stamp would not show your status as PR was pending.. you can't get one until you are a PR.

Did you at any point claim to be a PR to the lender, or did your mortgage broker decide that you were one (they sometimes do). Do what 'becca suggests. They can not deny you the loan, but they may not offer you the same terms. Is your income part of this loan?

Hi, there,

Thanks to all for your replies.

At no point did I claim to be a PR. In fact, I made it very, very clear that my application was pending and that I was not yet a PR.

My income is the sole income for the mortgage. I’m down as the borrower and my wife is down as the co-borrower (she’s the USC with excellent credit).

We’ll see, I suppose.

[rebeccajo 14]

What is the I-551? Should I require it in my circumstance or is it something out-of-date that they're referring to?

It's evidence of Permanent Resident status; you're not a PR yet. An I-551 stamp would not show your status as PR was pending.. you can't get one until you are a PR.

Did you at any point claim to be a PR to the lender, or did your mortgage broker decide that you were one (they sometimes do). Do what 'becca suggests. They can not deny you the loan, but they may not offer you the same terms. Is your income part of this loan?

Hi, there,

Thanks to all for your replies.

At no point did I claim to be a PR. In fact, I made it very, very clear that my application was pending and that I was not yet a PR.

My income is the sole income for the mortgage. I’m down as the borrower and my wife is down as the co-borrower (she’s the USC with excellent credit).

We’ll see, I suppose.

There's no "I suppose" about it.

Only a sub-prime lender would insist on a higher rate because you are not yet a PR.

Stand your ground.

[Mark UK 3]

What is the I-551? Should I require it in my circumstance or is it something out-of-date that they're referring to?

It's evidence of Permanent Resident status; you're not a PR yet. An I-551 stamp would not show your status as PR was pending.. you can't get one until you are a PR.

Did you at any point claim to be a PR to the lender, or did your mortgage broker decide that you were one (they sometimes do). Do what 'becca suggests. They can not deny you the loan, but they may not offer you the same terms. Is your income part of this loan?

Hi, there,

Thanks to all for your replies.

At no point did I claim to be a PR. In fact, I made it very, very clear that my application was pending and that I was not yet a PR.

My income is the sole income for the mortgage. I’m down as the borrower and my wife is down as the co-borrower (she’s the USC with excellent credit).

We’ll see, I suppose.

There's no "I suppose" about it.

Only a sub-prime lender would insist on a higher rate because you are not yet a PR.

Stand your ground.

Are mortgage companies/banks able to use my immigration status as an excuse to give me poor terms – such as increasing my interest rate (which I suspect is what happened on Friday)? We, according to two separate places, have ‘A1 credit’ and we have a relatively high level of disposable income, no credit blackmarks, etc.

[meauxna 15]

Are mortgage companies/banks able to use my immigration status as an excuse to give me poor terms – such as increasing my interest rate (which I suspect is what happened on Friday)? We, according to two separate places, have ‘A1 credit’ and we have a relatively high level of disposable income, no credit blackmarks, etc.

Mark--what happened on Friday?

What rate is your lender offering you (and with what point buy-downs etc). Is is competative to what you've seen elsewhere?

Did your lender change your rate offer? What did the broker say?

[Mark UK 3]

Are mortgage companies/banks able to use my immigration status as an excuse to give me poor terms – such as increasing my interest rate (which I suspect is what happened on Friday)? We, according to two separate places, have ‘A1 credit’ and we have a relatively high level of disposable income, no credit blackmarks, etc.

Mark--what happened on Friday?

What rate is your lender offering you (and with what point buy-downs etc). Is is competative to what you've seen elsewhere?

Did your lender change your rate offer? What did the broker say?

Basically, to free up some cash for kitting out the new house and to avoid paying PMI, we are taking out an equity loan at what was 9.25% for a part of the sale. This was a little high but they claimed to be able to go 'straight to close' without any income checks, etc, because our credit was very, very good - so we figured that when we sold our 'old' house, we'd pay off that loan quickly.

However, we receive the loan papers on Friday and that 9.25% is now 10.4% without any warning and within a three days of the original closing date (very little time to get it changed!). For no apparent reason. The mortgage agent has no explanation and is very sheepish, though occasionally mentions 'the markets' (a 1%+ increase?). I ALMOST got him to admit it was because of my 'citizenship problem' but he stopped just short.

Our problem is that we have a hard deadline of Wednesday (put back to Friday) else we will lose the house (as there are complications with the sellers' bank). And I think the bank know this.

Either I'm unlucky with banks or they're all terrible here....

[perfect 39]

Typical bait & Switch tactic! Then they say that the "good faith estimate" is just that - an estimate made n good faith but which you can't hold them to.

(as a guide here are the current average rates - National Averages: Low - 6.00% Average - 7.53% High - 10.75% )

We nearly fell foul of the same tactic and now have a friend who works in the mortgage industry who told us to be aware that most companies try to use this trick. If you want to PM me I can give you his details so he can perhaps give you some solid advice - no strings or anything.

I don't know what to suggest in view of your timescale deadline but if your credit history is as good as you say there shouldn't be any problem whatsoever in getting yourself a great rate somewhere else.

Here are a few examples of “bait and switch” tactics to avoid:

Advertising low interest rates and points, but making it up with undisclosed very high closing costs. An extra, undisclosed $1,200 in closing costs and fees is the same as a discount point on a $120,000 loan! Some lenders that advertise low interest rates have huge fees that serve as hidden discount points.

Offering a “no closing cost” option and making it sound like there are no loan fees. You can get a “no closing cost” loan from almost any mortgage lender if you choose to have a higher interest rate or a larger loan amount. This is not necessarily bad unless it is presented in a deceptive way.

Advertising a low sounding interest rate and not disclosing high fees to you until after you have paid a non-refundable “application fee”. An honest and ethical mortgage lender should not have to collect an up-front application fee that you can’t get back if the deal turns out not to be as good as you first thought.

Advertising for refinance that claims “no out of pocket expenses” without explaining that your closing costs are either added to your loan balance or the loan has a higher than market interest rate. Again, not always a bad idea, if it is properly disclosed up front in the ad. Otherwise, it is a “bait and switch” tactic. There are no free lunches!

Advertising interest rates and terms that are not really available. This is a very common practice in the mortgage industry. Mortgage lenders who advertise their rates know that they only get your interest if the rate they are advertising is the lowest. Consequently, many will offer a low rate that they cannot actually deliver to you! They avoid the legalities of false advertising with numerous disclaimers. “The rates had to be submitted days before going to print and those rates are no longer available.” (They never were!) “The rate quoted was for a loan larger than yours.” (Or the lock period quoted was shorter than the one you need. Or, or, or ….. It’s always something.) If the rate looks better than the current market dictates, they cannot deliver the loan and you should not reward that lender with your business!

Check out this website which is quite helpful : https://mortgagetrap.c3.ixwebhosting.com/baitswitch.htm

Edited March 27, 2007 by perfect

[Mark UK 3]

Typical bait & Switch tactic! Then they say that the "good faith estimate" is just that - an estimate made n good faith but which you can't hold them to.

(as a guide here are the current average rates - National Averages: Low - 6.00% Average - 7.53% High - 10.75% )

We nearly fell foul of the same tactic and now have a friend who works in the mortgage industry who told us to be aware that most companies try to use this trick. If you want to PM me I can give you his details so he can perhaps give you some solid advice - no strings or anything.

I don't know what to suggest in view of your timescale deadline but if your credit history is as good as you say there shouldn't be any problem whatsoever in getting yourself a great rate somewhere else.

Here are a few examples of “bait and switch” tactics to avoid:

Advertising low interest rates and points, but making it up with undisclosed very high closing costs. An extra, undisclosed $1,200 in closing costs and fees is the same as a discount point on a $120,000 loan! Some lenders that advertise low interest rates have huge fees that serve as hidden discount points.

Offering a “no closing cost” option and making it sound like there are no loan fees. You can get a “no closing cost” loan from almost any mortgage lender if you choose to have a higher interest rate or a larger loan amount. This is not necessarily bad unless it is presented in a deceptive way.

Advertising a low sounding interest rate and not disclosing high fees to you until after you have paid a non-refundable “application fee”. An honest and ethical mortgage lender should not have to collect an up-front application fee that you can’t get back if the deal turns out not to be as good as you first thought.

Advertising for refinance that claims “no out of pocket expenses” without explaining that your closing costs are either added to your loan balance or the loan has a higher than market interest rate. Again, not always a bad idea, if it is properly disclosed up front in the ad. Otherwise, it is a “bait and switch” tactic. There are no free lunches!

Advertising interest rates and terms that are not really available. This is a very common practice in the mortgage industry. Mortgage lenders who advertise their rates know that they only get your interest if the rate they are advertising is the lowest. Consequently, many will offer a low rate that they cannot actually deliver to you! They avoid the legalities of false advertising with numerous disclaimers. “The rates had to be submitted days before going to print and those rates are no longer available.” (They never were!) “The rate quoted was for a loan larger than yours.” (Or the lock period quoted was shorter than the one you need. Or, or, or ….. It’s always something.) If the rate looks better than the current market dictates, they cannot deliver the loan and you should not reward that lender with your business!

Check out this website which is quite helpful : https://mortgagetrap.c3.ixwebhosting.com/baitswitch.htm

Wow. Thanks a lot for that. I do think we've fallen foul of a couple of things in here at least.

I've made it very clear to the mortgage agent that I absolutely will not pay that rate and I'm willing to walk away. However, my wife is upset with that stance.

I think with the timescales at present, we are looking at either getting hit with the higher rates or losing the house. After four months of searching for a house, it seems awful to have to walk away now.

It's really sad how this does not appear to be isolated cases but potentially industry wide.

[perfect 39]

My husband's credit was Baaad and mine obviously was non-existent for a while and is only just now in the realms of ok having been here now for 2 years.

When we looked at doing a home eq loan the rate we were quoted was 8.75% and that was last year when base interest rates were higher than they are now. It does sound like you are being ripped off which I hate to see.

I don't know if he will be able to help - but I'm going to PM you the name of the guy who did our refi for us (got us 5/75% when other people were quoting 7-8%) and he warned us of a lot of the scams used. I'm sure he will be able to give you some good avice if you choose to give him a call.

Seems a shame to loose a nice house, but why should you be penalised when you have great credit just because of someone else's greed? Why should you be paying 2-3% more than you should be?

[meauxna 15]

Are mortgage companies/banks able to use my immigration status as an excuse to give me poor terms – such as increasing my interest rate (which I suspect is what happened on Friday)? We, according to two separate places, have ‘A1 credit’ and we have a relatively high level of disposable income, no credit blackmarks, etc.

Mark--what happened on Friday?

What rate is your lender offering you (and with what point buy-downs etc). Is is competative to what you've seen elsewhere?

Did your lender change your rate offer? What did the broker say?

Basically, to free up some cash for kitting out the new house and to avoid paying PMI, we are taking out an equity loan at what was 9.25% for a part of the sale. This was a little high but they claimed to be able to go 'straight to close' without any income checks, etc, because our credit was very, very good - so we figured that when we sold our 'old' house, we'd pay off that loan quickly.

However, we receive the loan papers on Friday and that 9.25% is now 10.4% without any warning and within a three days of the original closing date (very little time to get it changed!). For no apparent reason. The mortgage agent has no explanation and is very sheepish, though occasionally mentions 'the markets' (a 1%+ increase?). I ALMOST got him to admit it was because of my 'citizenship problem' but he stopped just short.

Our problem is that we have a hard deadline of Wednesday (put back to Friday) else we will lose the house (as there are complications with the sellers' bank). And I think the bank know this.

Either I'm unlucky with banks or they're all terrible here....

Hmmm.

That's not a great equity rate, but it's not the worst I was quoted (13.5%--and that was from my current lender!). Equity rates are not normally as good as a straight mortgage.

I'm sorry I don't have any solutionso off the top of my head. What does your Realtor think would happen if you sat on your hands a bit? Any chance to extend your deal while you shop a bit more? I hear it's a buyer's market...