Subject: File No. S7-14-11
From: Ronald W Buckelew
Affiliation: Veteran

July 24, 2011

Caught in the Rules Changes

In August 2010 I entered into a sales contract with Prudential and Long Foster Realtors for a $380 K home in Ashley Plantation. My loan was prequalified with a 20% down payment and closing September 1, 2010. On the closing day I was notified that the home was involved in a "short sale" and it would be 6 months to a year to close. I agreed to wait for one month to see if the situation would change. Within the month the house went into foreclosure two times. At that time I cancelled my contract and decided to build near the same location.

I purchased a lot and obtained a construction loan from the Bank of Fincastle for the construction of the house. My lot was the 20% down payment. I was told I was qualified for the construction loan would be good for one year and we could close upon completion of the house with no surprises. The house was completed in March 2011 and I applied for a conventional loan. After months of paperwork, most of which I have never heard of during my 40 years of building, I was told that I could not obtain a conventional loan due to the "changing of the rules."

I am now 5 months and two lenders later and still cannot obtain a conventional loan. I have cashed some of my IRA's, which means a 30% tax liability in 2012, and came up with more down payment. I was still unable to obtain a conventional loan. Meanwhile I am living in the house with my family and paying the construction loan payments along with the utilities and have no problems. I am facing a situation that I have no control and no recourse. I am assuming that this means bankruptcy or foreclosure and out on the street account of not bearing able to obtain a cheaper conventional loan of 4.78% vs. 6% construction loan. You figure this one out It doesn't make sense to me that I can pay the larger construction loan payment but not the cheaper conventional loan payment.
I have asked for help on the government web sites along with Senator Webb in the Congress and both have no answers. My credit score is excellent as I have not missed a mortgage or credit card payment in 50 years.
I am sending this letter to the web site that you mentioned in your news article.

Thank you,

R. W. Buckelew