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26 Comments on Dear MLOs and Mortgage Brokers
Really! I just went through this!
So what is Pre-Qualified? Let the MLO's and Mortgage Brokers need to give their definition of this process! Then maybe, just maybe we Realtors can then proceed in a right direction!
James what really burns me up is when they know the buyer will be hard to finance and they MLO knows that they will have to crawl under every rock and find a lender that might even have a conversation with them about financing the buyer. Arghhhhhh is right.
BLiz "worthless" is the right word. As a matter of fact, it's the only word.
You know Deborah, it just behooves me why anyone would take buyers, sellers, agents and everyone else involved through such a time wasting experience.
For me Carla, maybe once I'll take them out before the preapproval but that's IT.
Forgetaboutit! Exactly Susan.
Sussie I've talked about this before and I think that loan officers would agree (or correct me on this) when I say that:
A pre-qualification is akin to an MLO taking an application and running a prospects credit and then saying "oh, I think we can work with this, based on what you've told us."
A pre-approval is when the MLO or lender has verified that everything on the application was true (rental history, employment, income, etc....).
Charita, there is nothing more disappointing to a buyer and their agent thinking they are pre-approved and actually not. It is a very irresponsible act for some of the lenders not checking thoroughly with the buyer's financial information and gave them the "pre-approval letter".
Not only that Rita, but some agents representing the buyers know full well that the pre-approval is worthless. That's the part that really gets me.
That sounds like some pre-approval letters I have seen from some of the largest banks around. Of course when there is an offer on one of their properties they seem more interested in doing it right.
You can get one of those online anywhere. Crazziness. That's why I always want a name and a number of the person who "pre-approved" a potential client so I can verify that they are.
I promise that I will NEVER, EVER:
Spew out a piece of crap pre-qual letter after blinking my eyes and producing a credit report (or was it producing a credit report and then blinking my eyes?).
Spit out worthless piece of paper pre-qual letter without verifying that everything they stated on the loan app is indeed true.
I do promise to ALWAYS:
Collect a boatload of documentation (2yrs tax returns + supporting documentation, 90days bank statements, quarterly asset statements, 30days paystubs, rental/lease agreements, credit reports, LOE's, etc...) before issuing a letter stating everything that I have collected.
Review and analyze all the documentation I receive for any data and/or info that does or does not meet program guidelines and/or lender requirements (which also means I know exactly where I'm sending it).
Provide an automated underwriting system (AUS) approval as well as outlining some of the necessary documentation that is needed to close the loan.
Provide a letter of any additional documentation (fully executed purchase offer, prelim title report, escrow instructions, satisfactory appraisal, etc...) or tasks (registering loan, issueing disclosures, locking the rate and program, underwriter review of documentation, etc...) that will be required in order to close the loan.
Run my borrowers through my humungous magnifying glass and turning over every rock and searching for any bug that could be possible lying in wait to come out and infect the entire transaction.
I feel inspired! Think I'll do a post asking for a few promises from some of the local Realtors/agents in my market. :)
Christine that works very well when we an get to the buyer before they get to a lender (that we don't know).
Gene is WF one of them?
Always Brenda. But it's been a while since I got this line "I can't remember their name."
Donne that sounds like the new MLO Credo if you ask me. I've inspired you. I'm so excited. We were just talking about that lack of inspiration and mojo on another post this morning. Maybe we just needed to inspire one another.
Charita - Thankfully I haven't encountered this problem yet and hopefully I never do. We entrust MLO and brokers to do their job so we can do ours.
MIchelle I hope you never will either. You've been very fortunate. Is that a new pic?
Charita, it is a complete waste of time if they are not!
At Prospect we offer several of the more unique loan programs like FHA 203K, HomePath, and HomePath Renovation. Since there are not very many mortgage companies that do these types of loans, I get calls almost every day from buyers and agents who I do not know and have never spoken to before.
I give everyone the same list of requirements needed for a Pre-Qualification:
You would be surprised at how many real estate agents ask "why do you need all of that just for a Pre-Qualification?" "We just want to make an offer" is the next phrase I hear. Guess what, Fannie Mae does not want a contract from an unqualified buyer.
You would think I was asking for the impossible. I politely explain to them that I will not be issuing them a Pre-Qualification until I have reviewed all of the above. I had a buyer today who could not understand why he could not get a gift for his down payment for an investment property. After 3 times of stating that Fannie Mae does not allow gifts on investment properties, I quit responding.
"I had a buyer today who could not understand why he could not get a gift for his down payment for an investment property."
Charita - I am in total agreement with you...not worth putting buyers in your car unless you have a REAL pre-approval letter in hand...but there are agents in my market that send that same worthless piece of paper over with their buyer's offer on my client's listing. Now those letters always have the name & number of the MLO in case you have questions...like "Did you actually verify the information, or is this just a pre-qualification letter?" Now you know, once in a while I don't know my co-broke agent OR the bank/broker the buyer is using, so I'll make that phone call before I present the offer to my seller. Don't you know that someone is always upset that I would make that call??