Mortgage approval... then withdrawn - possible?

We are Approved for a mortgage, have signed all the papers, put down a deposit and the house is considered SOLD.

However, today the mortgage broker called saying the bank didn't receive the fax with my pay stubs. I sent them through over a month ago and am just hearing about this now (our closing date is in 2 weeks!)

If hey find a problem with the paystubs (I may of stretched some truths a little), can the mortgage be withdrawn at this point? We've already informed the landlord of our building that we're moving out and the apartment may be rented.

[HomeGuru]

Yes, your mortgage committment can be withdrawn at any time up to the second before closing and the second before recordation.
With respect to your pay stubs, it is not wise to alter if an employee or otherwise fabricate if self-employed.
There are severe penalities including heavy fines and imprisonment for fraud. Just read the Fannie Mae 1003.

Well I haven't altered anything. I actually work at a firm and have worked at the same firm for 2 years, however as a contract worker.

[HomeGuru]

Originally posted by mattyb
Well I haven't altered anything. I actually work at a firm and have worked at the same firm for 2 years, however as a contract worker.

My response: then what was the " I may have stretched the truth" comment all about.

I sent the cheque stubs of pay I have received. And my employer sent a letter stating that I'd been working there for over 2 years, which is true– just that I'm not on payroll but, well working for myself. To avoid the cost of employing me– CPP, UI, etc.
Does that make sense? I was actually telling a half truth I guess.

I was thinking that they'd ask us any questions when they got all this info before we did all the paperwork, and of course I'd answer them truthfully if asked.

[HomeGuru]

Then on the loan application you were supposed to put self-employed rather than the name of your employer since you are an IC.

and remember next time most mortgage companies out there would loan money to a truthful un-employed person before they would a "stretch the truth" working one