Many of you who regular read my writings know I often write what others are thinking even if they don't want to publish it. This, of course, makes me the point of contention for some while other appreciate my openness and *transparency*. That word is so abused these days - especially by those people who claim that by telling you the costs of the mortgage up front they are somehow the only people in the industry you can trust. Hogwash and bologna.
In my years in the industry I have seen thousand (and thousands) of mortgage applications. The greater majority of those applications have become loans. During the last 3 and 1/2 years I have written about what happens between application and closing many times right here on Active Rain. Hopefully you have read enough to pick up on the fact that there are as many as 35 or more moving parts and people in the mix from application to close. Oddly enough I had a "loan officer" once argue with me about that number. But I digress.
Escape me it does not that there are people in the mortgage industry who are inept and have a difficult time comprehending the process themselves and that makes it harder for people not in the industry to know if they are working with a mortgage professional or an application taker. That being said I have always made myself available to anyone, from anywhere in the country, for any reason to answer questions about what is happening in the loan process. Call my Google Voice number at 678-439-8683 and we can chat about it.
Professionals tend to want to do everything in a very planned order of execution and, as a general rule, that planned order goes something like this:
- Talk to the prospect about the loan needs and interview them for details of the type of transaction they are interested in or which will best serve them.
- Take a complete application which includes asking where the borrower(s) work, bank and live for the last 2 years.
- Examine and evaluate the credit report.
- Barring obvious reasons to deny or suspend at that point the mortgage professional will use an underwriting engine for a preliminary decision which will be based solely on statements made by the applicant regarding employment, income and assets and the credit report which will be read directly by the automated underwriting engine.
Let's call all of the above "The Initial Application Process". Some people seem to believe that's all there is to the mortgage process even though all of that generally takes less than an hour. You can rest assured it has only just begun. In fact this does not even mean an approval. It is simply a pre-approval or an application approval - not a loan approval. This is the end of the easy part.
As a borrower you will now have a list of things to gather. I have written about those before so I won't bother making you read them again.
Read it here if you want.
During the next few to several days you will be asked to provide some very private details about your finances, work history and residence history. Some of it may seem too intrusive or too bothersome for you. If you are a very skeptical and private person you may have more resistance than another but we are all equal under the rules of lending based on the five things that matter most: Credit, income, assets, property type and loan purpose. If you and/or the property present a lower risk you will enjoy a simpler ride from start to finish. If you and/or the property provide increased risk the due diligence of the lender, mortgage insurer and mortgage investor are going to make things more complicated simply by virtue of risk and underwriting guidelines.
I'm glad you read down this far because what I want to say that every mortgage professional has to deal with is the process of meeting underwriting and risk guidelines from the lender, the investor and the mortgage insurer (if there is one): Don't argue about what I am asking you for. When you do you waste your time, my time and the time of the other people depending on me closing your loan. You also waste the time of the 10 other borrowers and their agents and the sellers of the homes they are buying with whom I am working.
When I ask for a copy of the bill of sale for the 1956 Edsel you say you sold 2 months ago to come up with the down payment - just say okay and fax it to me. When I ask for for a copy of your CD information from the bank to prove you actually have $50k in CDs with them - likewise. When I ask you for the name, address and phone number of the company where you worked 18 months ago before you took your new job go find it and get it to me. When I ask for a picture of your foot in a cast because you are out of work for 9 weeks due to a broken toe SEND ME THE &%$@! PICTURE. Trust me - I don't want a stack of crap I don't need setting on my desk which already looks like Denis the Menace is my assistant - I need it to close the loan.
Oh, and another thing, I don't care how many things I have asked you for and how many things you have sent me if I call you the morning of the closing (chances are I won't) and I ask you what color interior was in the car your parents drove you to school in on your first day of school - DON'T ARGUE - just get the answer.
If you keep in mind the fact that you are asking someone to buy a home for you and let you pay them back slowly over a period of up to 30 or more years and that in the last 2 years a huge percentage of people defaulted on that promise to repay for any number of acceptable to ridiculous reasons we'll get along just fine. And if you keep in mind that the LOAN OFFICER is the last person to ever get paid on a closed loan and that we don't earn one penny until your loan is closed and funded you'll begin to get the picture we are actually TRYING to get your loan closed not to keep it from closing.
Oh, and any loan officer or lender who tells you they won't put you through all this is full of ... well, you know what and it's not truth. If you are asked for very little documentation consider yourself and your property a great credit risk. The other 99% of the people are going to provide "stuff" to get their loan closed.
Can we be friends now? Why can't we all just get a loan?
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