My wife and I were approved for a construction mortgage in October 2002. When we went to convert the mortgage over to a conventional mortgage in April 2003, we were denied because my wife became self employed and they will not use any income unless she has two years of tax returns. Our debt to income ratio is very bad without her income. She runs a daycare and makes gross $1,000/wk, which is more than she made before. So, I went to my local credit union and was approved on my income alone. Now, the questions is GMAC wants to charge me a 2% fee for not turning the construction loan into a permanent mortgage!! Now remember they said that I could not and THEY would not do it. It says in one of the 80 pages that I signed at the construction closing that there would be a 2% penalty if for any reason it was not converted to a conventional mortgage, but this is a special circumstance, I think. To make matters worse, in speaking with the Vice President in the construction lending department, he says, “Well if your wife had not started her own business you would not be in this predicament”. What is that???