Can a mortgage company changed their guidelines when they are already working a loan ?

My DH and I are in the process of buying a new home. We signed the contract, etc. We were told that we needed a high score of 580 to get the loan. So we worked hard on our credit paying everything thing off, etc. Well now the mortgage co rep is saying that we have to have a mid 600 score to get the loan. Really does not seem fair to us. We are supposed to go to settlement on 4/15/07.Can a mortgage company changed their guidelines when they are already working a loan ?
Had the loan been approved? When you say you signed a contract, are you talking about a contract for the house? Usually the final paperwork with the lender isn't signed until the closing. Hopefully the contract you signed on the house had a clause in it that the purchase was subject to you being able to get financing.





Lenders are going through record foreclosures right at the moment so a lot of them have tightened up lately on any new loans.





See if you can find another lender. Talk to a mortgage broker. They usually know who will loan what in your area. Your real estate agent can help get you in touch with a mortgage broker.Can a mortgage company changed their guidelines when they are already working a loan ?
So long as the lender is not being discriminatory in its practices, it is free to revise its lending criteria at any time. given the havoc in the subprime mortgage market, expect lenders to be raising their standards for mortgage origination. Many people on the margins are not going to be approved for loans now that they would have gotten a year ago.





If however you have already obtained a written mortgage commitment from the lender, that is good for the period specified in the commitment and the lender cannot avoid the loan by changing its lending criteria. That is an enforceable contract, subject to the conditions set forth in the document but at that point the credit issue has been satisfied.