Loan Approval letter means a done deal right? Wrong!

George,

Oh man...you picked the wrong post for me to read...this is an ongoing thing in Florida..go check out my rant posts on this. Commitments are not being met...lenders are lying to the buyers and even if you have a commitment date in your contract and are assured by the Realtor(R) that they spoke to the LO and it is a done deal...they still fall through. And the LO refuse to take responsibility...they just say they are not a party to the contract. How can they not be a party to the contract? There is a financing clause in every contract ...yet if it falls through they run away. My new thing I like to add to the contract is that if there is a time-line for a commitment date and if that date cannot be met then they must notify the sellers agent in writing before it expires as to whether they are asking for an extension to the commitment date. If it is accepted in writing by the seller then we continue...if it is not then the buyers deposits are returned and the deal is dead. But if they fail to send anything in writing and the date expires...then the seller has the right to keep the deposit and it is released immediately. I am so tired of giving 3 extensions and then find out the bank didn't do their jobs.

George- It all comes down to this. a mortgage banker has an advatantage over a broker. I know both of my Underwriters. I mean I see them everyday and I submit my files to them. A Broker doesn't have this same relationship. When you work with someone for a length of time you start to understand how they think and what they expect. I know what my underwriter is going to want before I ask for it. If I am not able to get the required documentation within the first few days,We don't have a deal an I won't write you a letter.

As for the invetors changing their guidelines- The investors are not stupid. They change their guidlines to protect their interest.But, It is up to the loan officer to Read and Double Check the gudelines to make sure that the customer still qualifies. I think a loan officer may be using excuses for his lack of knowledge of the programs that he is selling. Once a rate is locked with an investor, you have the length of time he locked to get that deal done. Even if the investor changes the guidelines,They will honor the old guidelines for files that have been submitted prior t the change.

Sorry, I look at this from a different perspective. I am the person that writes the letters and if I didn't give you a letter.But, I told you the customer was approved. You can start planning on spending your commission, Unless something other than the mortgage falls out.

George sorry to hijack your post but this pisses me off more than  anything in this market. The underwriters could care less about a closing date. They just pile it up on their desk. They do not care if it closes on time. I have hear underwriters say this to me. If they would all concentrate on working with us and not against us maybe we would get along and close deals on time or at all.

Shaun,

The problem I have is after letter is issued the buyers start shopping the loan and screw up the closing dates and then both the buyer and the Realtor(R) do not take into account that all bets are off and the whole process starts again. They  do not realize that when you switch the next one will not accept the submission of appraisals or any other documents from the previous loan. And then the stall until it is too late. You can imagine the ridiculous excuses I have been given as the listing agent. One deal that just fell through after 3 extensions...they claimed they need 5 business days to change one letter in the persons name..the spelling was wrong. I found out later there was more than that. But they still lost the loan and the deal died and the escrow was collected no questions asked. You might be an exception to the rule but most we deal with here are not professional and they get down right nasty if you fight with them. They need to defend their mistakes but do not admit to them.

Neal-I work for Centric Mortgage. We funded over $300,000,000.00 in loans last year.I can send you a picture of our sign. It says Centric Mortgage On time every time. We are a Mortgage Banker. There is a big difference between a Broker and a Mortgage Banker. I can assure you If I give you a Letter, that if your loan doesn't fund,that it is not our fault. I do deals with Realtors that have Mortgage Companies in their office. The reason why is if I say we have a deal, we have a deal and I can show you the money.

We are licensed in 35 states. If you are tired of losing deals,even if you are the sellers agent, request that they call me. I can mail away the file and if it is less than a 2hour drive, I will even be at the closing.

Shaun Wren

Centric Mortgage

The letter should be worth as much as the check for the home. It is sad that times have changes so much that a person's word isn't good enouh and now the Approval letter won't be good enough either. The check or wire that is written for the home should be the next thing to question.

George,

I feel your pain. This reason alone I have changed the way I do business. I am now requesting (standard when representing my sellers) That all EM becomes non refundable and RELEASED to the seller upon inspection contingency removal. Just in case. I also stay on the buyers lender and make sure that everything is following suit and looking for red flags. I know that this does not solve the problem but I think this would detour any buyers who are marginal and not confident in their ability to preform. Your sellers will know and appreciate the fact that you are working and looking out for their best interest.

Goerge,

Sorry,

Shaun I understand you probably run a reputable company but unless you can experience what we are going through in Florida or what Georges frustrations are then you probably do not know what we have to go through. Our clients depend on us...we do not make the decisions for the buyers agent or their buyer..true we can suggest they get approved with one of our people we know will tell us yes or no but...more than less they are not comfortable and want to use their own person..usually is it the friend who ruins the deal. But that is just one example. How can you promise to lend someone money to but a home then both parties end up with no place to go..if the seller has to move or the buyer has to move..what about all the domino's that will fall. You guys promise the world but if it dies then you are not a party to the contract and run away. I hear this every day and I'm so sick of the lack of communitcation underwriters and processors have with us and the person selling the client the loan. I could care less of the title they have..get the job done and close on time. It is onlt making consumers gun shy to buy homes because of the stress.

Neal.

I am in Lakeland Florida. (Right smack in the middle) I can understand your frustration. You are told by the broker that everything is ok and they even go as far as to give you a letter that says that your deal will go.

My intention wasn't to defend all loan officers. On the contrary. What I said was that the Mortgage Person(loan officer,lender,banker,lo,broker,) what ever the name should do their job. There are steps to getting a file to closing. They have to follow these steps to insure that the deal goes well. If your read my blog Wholesale and Retail lender you will understand that a lender is different than a broker. I know the people that I submit my file to and know what they expect. I see them face to face almost everyday.

A person should not give you a letter until they know that the file will close. ( Not think it may close)

Do things come up? Sure ,But they should know that there is a problem within the first few days. Way before it is near the time of closing.

Also, I realize that you do not have control over the lender. I am only stating that our sign says" on time every time."  This means that we don't give out letters if they are not real.

Send me your deals. I am in Florida and am licensed in 36 states. We will get your deal done. But, If it is not a deal that we will be able to do - I will let you know as soon as I am able to do my verifications.

The bottom line is this. There are people that do their  job and people that don't. Just like with Realtors. There are Realtors that sell houses and there are Realtors that hope their houses sell.