This Lender may not have been qualified to offer FHA loans. You should be able to contact your local HUD office for a referral to FHA approved lenders in your area. You can also go to the www.HUD.gov and find a FHA approved lender in your area.
Your current Lender is required to notify you in writing regarding the denial of your credit request. You should file a complaint with the Credit Reporting Agencies that the lender pulled your credit report from.
Yes, the lender is required to provide the reasons for denial in writing. To that end, contact your lender and remind him of the Fair Credit Reporting Act – Which requires the letter. Good luck.
You should be able to get a printout of the Automated Underwriting System results. This is the program which a mortgage loan officer uses to enter income pertinent to a loan application. These things include size of the desired loan, interest rate, assets and liabilities, income, employment, other real estate owned, etc. These are generally online programs and after all information is entered the loan officer will click on the submit button and get an immediate approval or refer. This is fairly common in the mortgage industry and should be easily available to them. Ask for a copy of this report and have them explain it to you.
If the loan application goes to underwriting and they suspend the loan at that level, then the loan officer should receive a Notice of Loan Action from underwriting that states any reason/s for suspending the loan application. If it has gone this far then you can ask for a copy of the Notice of Loan Action from underwriting. As stated previously this notice should list any reason for suspending the loan application. I hope this helps you.