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This Pre-Approval Has More Holes Than A Wiffle-ball!

Ok, I got to be careful here. God forbid somebody reads this and hates me forever. I learned a long time ago and it has been written here, that beware of what you write in cyber space, you never know who may be reading. So, I'll try to be subtle, I'll try to be diplomatic, I'll try to make popularly parsimonious statements that help Real Estate Professionals and the people. I will try my hand at political correctness, I want to make sure whoever is reading doesn't get the wrong idea.

Real Estate Professionals can be IDIOTS! When there is a paycheck flashing in front of your face like a carrot on fine wire, its human nature to reach. I got a call today from a gal that was reaching....and I felt kind of bad telling her the truth.

Years ago, I made a crucial mistake. One that I won't make again. A friend referred a couple of co-workers to me and based on their application and credit, I handed them a pre-approval letter. It was a sketchy deal but I knew it could be done and wasn't overly confident they were buying anytime soon. I figured, with a little direction, they would be in a better place when the time was right. Silly me, two weeks after their application, a sales agreement was signed and I was on the hook to make sure they were taken care of. I gathered the documentation and facts behind their application and soon found out that I'd be lucky to get them a loan at all. By the way, I make mistakes, that was one of them. We closed their loan but I'll never put my clients or myself in that position again.

Today's phone call was from a Realtor who referred me a deal. I consulted both parties on what needed to be done to have the client qualify for the type of financing they would need to get them in the house. Collections needed to be paid off and documentation needed to be in my hands, it was a work in progress in my estimation. I thought I made that clear.

Yet, I was asked by the Realtor if I could hand her a pre-approval letter on this client. I reminded this Realtor of the situation and told them that me giving a pre-approval letter would be a slap in the face to any seller encountered. After all, this client isn't pre-approved...........not yet at least.

I told the agent I wasn't going to get anything over to them without having the documentation to back up what I could do for the buyer. I told that agent, "I can send you over a Pre-Approval letter with contingencies out the behind and more holes than a Whiffle-ball. Or, we can abide by patience and make sure the buyer can be properly financed? Your choice?"

The agent said they would get back to me and haven't. SHOCKING! Without a Good Faith Estimate (encompassing the costs associated with the loan you are taking out) and a Lock-In Agreement (Locking in the Interest Rate you were quoted), the terms and price of your loan are suspect. Regardless, make sure you can get a loan in the first place, make sure the Pre-Approval you've been given doesn't have all those holes. The terms and price of your loan is based upon the accuracy of your application and approval. I like paychecks, but I'll never make a mistake like I did then, again. Go look at houses, I'll make sure you can get financing and we'll make sure it is affordable.

Posted by Jason Sardi, Mortgage Banker on 10/04/2007 01:35 AM

Comments (89)

buying a house in pennsylvania, getting preapproved, allentown

Originally posted at: Real Estate Financing...: This Pre-Approval Has More Holes Than A Wiffle-ball!

Post is included in group: Pennsylvania Professionals

89 Comments on This Pre-Approval Has More Holes Than A Wiffle-ball!

OCT

2007

We can't allow our client's wishes to masquerade as facts. Ethics and honesty first! Love the wiffle ball analogy! Glad you don't consider ALL real estate agents to be idiots ;)

You done good lil bro. There will always be times when someone comes along and we need to remember why we got into the business. To help people (paycheck comes after) ....so we can always sleep well at night. WooHOO!

Just another example of how Pre-qualified and pre-approved mean completely different things!

:-)

Jennifer - Why of course not, lenders are idiots as well!

Sis - Nicknames win games...

Kris - Exactly!!!

Hi Jason, I have one lender and I give no other direction than to tell me the and the Buyer the realistic truth. So far I am very lucky. As far I remember, we have always been able to get the Buyer pre-aproved before we ever go out looking for homes.

I allow the lender to tell us what restrictions there might be and what is to be done. About 9 years ago, I did get a buyer that had IRS liens,child support issues and it took us all 6 months to reslove and today they have over $500,000 equity with perfect credit. I am their REALTOR for life and they said if I hadn't decided to make it my quest, this might never have have happened. 3 other REALTORS turned them down and did not want to get involved. I was embarrassed that they had been turned down, rolled up my sleeves and we all did this as a team effort. Needless to say, they are one of my best spoke persons today.

PS, I want to do an interview of the both of them and see if it would be OK to do a post about them. If I did first names only, I am sure they would agree. What do think, a good post?

Opps, Maybe I could actually have them write the story as sort of a testimonial?

William - That's what makes you my friend, your comments. Remember? That's all I have to say about your impact on ANY forum.

Bill - Yeah, good post!

Now you are getting greedy Mr. Johnson:-)

Jason, can you do loans in Louisiana? I've got preapprovals that TLW should have taken care of! Thanks for maintaining your high standards and doing the right thing, even when not everyone else is.

OCT

2007

Jason - Good post here. It sounds like you handle your business as we wish that all mortgage guys would! I would much prefer that our mortgage broker tell us the TRUTH, rather than blowing smoke and then having to figure out how to break it to all of us later.

Jason - so - you take these pre-qual letters seriously - I am proud of you - I tend to tell my seller's they are not worth the paper they are written on - no a pre-approval that is a different thing - at that point they are approved and not just qualified.... but I am proud of you for doing the right thing not everyone does.

Jason,

I'd be a bit upset at that Realtor for asking you to do something like that. That's just abusing the relationship you have with them and will make you look twice at anything they do from now on. I'm surprised they didn't take the pre-approval letter with all of it's conditions and ventilation. I imagine it'd get shot down anyway. You did the right thing, I'm proud of you.

Garbage in....garbage out!

Those realtors or other loan officers get DUMPED so quickly they don't know what happened to them...an apology is all I ask for, if they want to have me help them after pulling that type of stunt on me.

Nicely done....you will be around for a while; unless you get bored and decide to retire at a young age....

Congrats on the star Dahling.

I see this happening here in Maui with other realtors at times. The key point is how much they can put down. The first part of earnest check only at one thousound sends up flags to me.

I am willing to wait for a pre-approval before we go house hunting, I have found it to save me lots of time playing taxi.

As a listing agent in todays market I consider a pre-approval letter to not be worth the paper it is written on because way too many lenders just pump them out without regard. My counters include a demand for a lock-in letter and a loan commitment prior to acceptance. Love to watch those lenders dance when they see the terms. Good job Jason.

Is it just me or are you up late tonite Mr. Sar-dee? Here we are featured and answering comments on the same night, but at least it is before midnight in Calif. (I think....time flies when you blog)

I think it is great that you held your ground...please don't give it a second thought if Ms Realtor does not call you back. So much more important to protect your integrity and do what is right.

I still can't believe you had the guts to go on ActiveRain and say that Realtors can be idiots. Love ya, and congrats on your

Jason, I am a realtor and loan officer, i specialize in difficult deals and I prepare borrowers before they can get their loan pre-approved when needed and as long they understand and agree of the process because it does take time. I help them and guide them how to reduce their debts, improve their ficos then i get thier loan approve and sell them a house. i have many experiences with this subject. one of them, young couple bought their first home after we spent almost 6 months of planning, they had to reduce debts, improve their fico and they did with my guidance, they purchased their first home and stayed there for 5 years, then they mailed me a note (they could not find my phone#) they wanted me to represent them in selling their home and after that to help them buy their new home in the area of their choice, i did the double transaction successfully based on their trust and confidence that i earned from the past. Jason, keep up your good work, you will always be rewarded with loyal clients, of course, you keep in touch with them after you close your loan.

best wishes. lupe from burbank

Jason, you're one of the good guys. You would have been doing not only the sellers of an property a disservice, but the buyer clients themselves harm if you didn't tell them the truth and wait to see if the buyers would/could perform what they need to do.

Jason, I respect lenders like you and that is who I work with here. We are in the middle of a deal here where certain doc's had to be produced and letters written before we could get the approval, NOT a pre-approval.

Our lender had us wait a week, while the buyer gathered all the doc's. WE stayed in touch with the listing agent throughout and she knew we wanted to hand her an approval letter. So we got it and then we submitted the offer, it was APPROVED, and we close on the 9th.

Actually, this is my daughers transaction. Sure we could have thrown a pre-approval at the listing agent but in this case..............our lender needed to verify a few things and we waited. Now it is going smoothly.

You make me proud doing this.........when you are ethical, other deals will come along. No worries.

Congrats on your star, Sardi!

I have had a few bogus loan approval letters presented on my listings in the last few months. I have to say it is becoming a bigger problem. I am sure the real estate agents in your area appreciate the honesty. I save a lot of time and grief.

Jason,

Great post and I certainly not offended.

It sounds like the Realtor was simply sentencing herself to a couple of months work and frustration and no payday.

Jason, there is no point in having an approval letter "with holes like a whiffle-ball" because it won't be worth the paper it is printed on. Realtors who rely on such letters will only find themselves disappointed and will make a bad reputation for themselves when their deals fall apart.

Jason,

Those letters are as good as the cocktail napkin they are written on...mistakes are made as long as you recognize them and try not to let it happen again.

Jason:

I do the same thing. I just hate my fear of when I make an educated desision on a pre approval, then the customer calls another bank and gets one of those "wishy washy" pre quals.

The customer doesn't understand they are victim to the old bait and switch and then I am on the phone for the next 1/2 hour with the Realtor explaining why " I can't do that" Ick....

Pre-approvals used to mean something. Sadly, these days many of them are worthless. I've seen pre-approval letters that are still subject to credit checks. Huh?

Jeepers, I can "work up" a preapproval on word if I had to. I think a real preapproval should require a blood sample or something.

Jason, perhaps that agent will be one of the ones who gets weeded out of the herd during this market! Let the cream rise to the top!

Great blog! I would be much happier if the letters provided a letter and called it "conditional preapproval" and then stated what conditions still needed met. This would give you a much better view of the real picture. The lenders that we work with do this every time but some other agents in our market use lenders that will give an approval letter by just calling them on the phone WITHOUT any sort of verifications. This can create some serious frustration when you later find out they were not approved at all and had never met with the lender.

Jason, In my area they sale pre-approvals by the roll and they come in six pack economy packages. Most are completely worthless. I have a deal kicking right now, after 5 weeks of everything "going well", because the buyer does not have a credit score and has zero credit lines. Took 5 weeks to find that out!!!! Of course when I caled the LO prior to accepting the contract the buyer "has excellent credit and the loan is a no-brainer". Quite different from the real situation.

JASON all of us great mortgage pro's face this all the time. You are correct that there is a big diferent between pre-qual and pre-approved. Even still with loan programs going away this can put us in a tough spot lately s the real agent will have to understand about the current process.

ww.tampabayloanofficer.com

So many times i go to qualify someone and tell them they must fix their credit and can be ready to buy in a few months. They usually come to me and say they have a house they want to buy is there any way they can buy it. I tell them they can get a sub-prime loan (not so much anymore) but it would save them tons of money and aggravation if they they wait and pay off collections, etc. The next thing I know, I am getting an agreement of sale on a property! People want what they want and they want it NOW! One of the reasons for the turmoil in our industry right now.

Jason, What an awesome mortgage post !!!! I love how you write and tell it like it is....I usually don't read mortgage posts however you make reading them fun. ((-:

congrats on your well-deserved gold star.....

This one is definitely a high 5-er...

Great post, Jason!

And people can't figure out why they are unable to afford the homes. If they had gone the right route to get the pre-approval, things would have been OK. They first need to find out if they can afford to purchase a home and then what price range. It only makes sense. Of course, if they are struggling to pay for the home. guess who's fault it is.

Jason,

For the very reason you mention above the contracts in North Carolina have changed. The idea being that there are lenders out there that hand out "pre-approval" letters on a whim. We now use the pre-approval letter for the contract signing. However, to "lock-in" we have several dates now that are slanted in the sellers favor. Glad you took the high road.

Jason, everyone has said what I was going to say... but I felt if I didn't comment, you may think I slighted you. :^)

Congrats, nice work. (And missed ya yesterday at the office..... I had dugout seats ]

You are absolutely right, some real estate agents can be idiots. Thankfully there are lots of great ones who appreciate a loan officer like you who is going to tell the truth. Isn't it better to find out in advance what the problems might be, rather than once you are in contract? I don't want to work with a broker who won't tell my clients the honest truth- every time.

Hi Jason,

You are a pro my friend! I love that you take the time to get it done right, saves so much time in the long run. Congrats on your well deserved feature! :)

Jason,

I am late because my home computer is Broken.. I know for clarification Purposes, you are not saying all Realtors are Idiots... Just the few that think a Pre-Approval Letter is okay without Guarantees.. Why would they want a Garbage Letter? Great Deal Jason!!

I like your attitude :0)

Tom Weiss

Well put my young friend! Seems as though there is a slight misconception on the 'Real Estate Professionals can be IDIOTS!' comment. We as mortgage people feel we are in fact Real Estate Professionals. As are Realtors, appraisers, title people, underwriters, processors, etc. Unfortunately, in our profession, many don't take the time to be properly educated, nor do some have any integrity in the day to day operations of what they do. Thankfully, there are those of us who do. Thanks for being a true professional!

Jason, you are right. NO ONE wants a pre-approval letter for a client who is NOt pre approved. I want my clients pre-approved before they get into a car with me a 2nd time (they get one mulligan) because I don't want to waste my time showing homes AND I assume that, through the loan process, my lender has verified that the buyers are who they say they are.

In fact, when a buyer comes in with a loan pre-approval from someone I don't know, I tell them that's very nice, but I require pre-approval from a local lender I know as a condition of our buyer-broker contract. If they come in with a pre-approval from someone I know, I contact that lender to verify it is legitimate.

Good agents want you to be thorough and honest, so you won't be losing any business from them with what you've said here. You might even pick up some.

Thank you for blogging. I scrolled ALL the way bck up to rate a high 5.

Jason, BUT if you wrap a wiffle ball up with duct tape. Watch out, that sucker will fly. But most of these pre-qualification and pre-approval letters are suspect as you point out.

I think the clue is the prefix "pre" -- as in less than its complete and final state.

Jason, Way to take the "tend" out of Pre Approval letter...I'm proud of you and hope every lender reads this post. It takes courage to tell a Realtor that you can't get a deal done until their buyer performs but hey, if you get what you need then you can figure out if you can give what they want....Pride is in the performance! GOOD JOB! Then maybe if everyone starts practicing the same way, the next time I get a pre-approval letter I might read it as that..pre-approval instead of "pretend" approval. Great post! I give it a 5.

Wow, thanks to everyone for the wonderful comments! I promise to back later and address you all individually....

Thank you for your professionalism. I work mostly with sellers & it is getting VERY annoying to deal with these buyers' agents & their 'very qualified' buyers every day WITH pre-approvals that somehow cannot close - and it is always found out just before closing. I wish they'd be more like you.

Jason,

Outstanding post. The Wiffle Ball analogy is perfect.

Wiffle Balls have been manufactured in Shelton CT since shortly after the company was founded in 1953. They are and have always been "Made in America", which I think is pretty cool.

Ex-Shelton resident

Wow, I can't tell you how much that makes me laugh because I'm dealing with the same exact situation right now!!!! I have a potential buyer with a less than perfect score and a collection from a prior apartment (ugh). I told him to pay off the collection and we'll see about getting him into a fannie mae product. We'll the Realtor thought that they were already pre approved and said she was going to show them around the area for some houses! Heart attack waiting to happen!

I don't think Realtors are idiots, but they definatley think too far ahead.

Jason, As a real estate agent I know that without that pre-approval we don't stand a chance of getting an offer accepted, I would rather know my buyers have it before we start looking rather than after, but this is not always the case. I have been lucky though and my serious buyers have never had trouble qualifying.

First thing I tell those new clients is to get pre-approved so that they actually no how much they can afford, and not go lusting after homes out of their price range and wasting their time and mine.

Ahh, you mean to say not everyone is qualified just because they have a pre-qual letter :) :)

"The terms and price of your loan is based upon the accuracy of your application and approval." Now you've gone too far....you want Agents, Lenders, and Buyers to be honest :) :)

Very well handled, many RE agents just want the pre-qual or pre-approval and are blinded by the pay check not the facts. Why waste everyone's time? I would be surprised if that agent didn't keep calling LO's until they got someone who would say OK, I'll do the pre-approval letter...... That is very poor business!

Good job!

That's exactly why when I'm the listing agent, I make sure the buyer is also qualified by a lender I trust. I've fortunately learned from other agent's mistakes. I've even heard there are prequal letters you can download yourself from the internet. It's so important that the listing agent at the very least call the lender to check....for your seller's sake.

Don't be so harsh on the agent - we get lots of leads that go nowhere and we have to fish through them - and at least for me, my mortgage partners come in real handy! We usually "double-team" the prospective buyer and get to the bottom of the financing challenges. In the last few years, loans could be had for many problematic situations so I'm sure this is what your agent contact was hoping for - I'm assuming you work with them regularly? I sure hope my mortgage partners aren't calling me an "idiot" on their blogs (they don't have one anyway) for sending them rough customers.

The good ones live an learn.

Hey. Try being on the other side with an agent who would ask for a phony "pre-approval" letter. They pay absolutely no attention to the contract and just go blithely through life intimidating their way to what they want.

Just because an agent ASKS for a pre-approval letter doesn't mean the lender's rules go out the window.

Pre-approval letters should have meaning.
Contracts have meaning.
Applications have meaning.

None of these critical documents should be treated Cavalierly or they will cease to have any meaning.

Jason, when you write a preapproval letter, your own reputation is on the line. I don't blame you for wanting to be sure you can approve them before you say you can.

Good for you, Jason. I have a sneaking suspicion that REALTOR® will not be in the business next year.

Jason, hard to believe that the Realtor or should I say agent actually doesn't get it. More Lenders like you and less agents like her and we will have less foreclosures!! Keep up the good work!

Jason, whiffle ball is certainly a porous enough analogy. Pre-qual, pre-anything is non binding, as we all know. It's loan approval that we're alll looking for these days. Thankfully up here we get that more than not.

good post and appreciated the dance you did around some agent practices, or lack thereof.

best...

Jason,

How does your pre-approval letter read? The way I have mine set up is the way the PRESIDENTS CLUB members at my last bank had it worded/written. You also need to back yourself up as well. If you have a close working relationship with a Realtor then he/she knows your style and will be fine with whatever you do for his/her clients. I did a pre-approval letter today for a Countrywide REO property where I know that the buyer is already going for a special first time home buyer program with CitiMortgage, meaning I am doing the pre-approval knowing that I am not going to get the business. What I'm trying to say here is that I explained to the realtor who I bumped into on the streets during my DOOR-to-DOOR broker open house voyages that remember this please and send me your next buyer if these buyers don't come with me. Countrywide owned properties before making an offer need to have a pre-approval letter from a Countrywide home loan consultant. Just wanted to share this with you and everyone else here.

I apologize for not being as active as I used to be but I am very busy these days. Atleast I feel like I posted a nice comment here.

Great blog, good job Jason! Keep plugging away my friend. I will admit that business is slower for me this month when compared to the last 3 months. This is why I am unable to be as active on here because I refuse to lose or leave the business. I have seen so many mortgage people and realtors leave the business that it's quite scary. Wish you the best the rest of the year!

Your ORIGINAL Active Rain Mortgage Man,

Nima

Nima, You are the ORIGINAL no doubt about it. There is only one Nima.

Jason... the worst is when someone tries to force your hand in doing something that you shouldn't. And some loan officers do this in fear of losing that client, because the realtor might tell them to go some where else. Go right ahead... save me the grief. Nice job... PS>.. I actually read this before it got featured, but then I was multi tasking 15 different other things... lol see you around. Bachelor party, right? yours? ;o)

Good for you that won't give out a pre-approval when you know it isn't sure. You are the kind of mortgage broker agents rely on to provide us with the truth.

Congratulations and not selling out and giving anyone false hope! It sucks to be on the end of a transaction where the sellers don't know if it is closing. I am working with some potential renters who were supposed to close the sale on their home last week. Condition after conditions need to be met and their search criteria is tough. They have lost out on homes and are literally down to two! Let's hope docs get to title tomorrow or more inventory comes up within their search.

It's not a game people!

Many pre-approvals have lots of holes, and many aren't pre-approvals at all, despite the heading at the top of the paper. That's one reason why we ask for the pre-approval letter at the time of the offer, so that we can determine the contingencies, the unverified items, and perhaps talk with the loan officer or mortgage broker as well.

Lisa - No, I do not. Have family down there though, so I would love to someday. Thank you!

Crouch- I didn't do it right in my early years, but I feel I've learned. I'm not good at the smokescreen anywhoo:-)

Thesa - It is the right & competent thing to do...I've learned a lot of that right here on AR.

Andrew- They did want the pre-approval letter with all that. I didn't give, disclosure...yes, crap...no. It's a 'work in progress' deal. I should add, the client is doing wonderfully!

Bill- Sometimes I wish I could, I would just write all day. Yet, I don't think Young Mr. Sardi is retiring anytime soon.

Thank you dahling (Tracy).

Gary - Money does have a way of speaking.

Darrel - Reason # 58 why I couldn't do what you do, I'm horrid with directions.

Laurie - You would be a tough cookie to work with, I'd love that very fact.

Janet - Yeah, well, I'm trendy at times:-)

Lupe from Burbank - Trust me on this one, the only reason I'm still around is I'm pretty good at follow-up.

I would like to think so Kris, I have a lot in the way of imperfection but I'd like to know I'm ever evolving.

Great story Missy, I smell a Post.....

Thank you Sarah!

Randy - I hope that situation gets reversed sooner rather than later.

Fred - Now you are a guy I would love to work with, even if you weren't in Pennsylvania.

Brian - Very true my friend, when are we going to spar?

Neal - Speaking of cocktail napkins.....

Jeff - Bad news is never easy to give, but I think it should be given VERY freaking fast when it arises.

Linda- Subject to a credit check, I'm pre-qualified to be our next president. I would imagine I'm pre-qualified for pretty much anything else as well:-)

Chris - That's not as ridiculous as that may sound, samples may be taken....

Diane - Time will tell, it always does.

Thanks Sam, the Real Picture is what it is all about. I'm not a very competent gambler.

Bryant - Sounds like the "no-brainer" is the LO.

Well, I am glad I'm not licensed in FLA just yet....thanks Will!

Michael - I've wanted to create a Mortgage All-Star Team, sounds like you would be a strong contender.

Jo-Anne - Wow, I appreciate that! I promise to write total crap from time to time as well.

Brigita - Oh, our freaking media.....

Tracy - I've made plenty of mistakes to get there....now I need to stay there.

Rob - You are a marketing genious. I heard about yesterday, in many regards, you are my freaking hero!!! And I consider you a friend. Don't worry about slighting little old me, I'll take care of all that:-)

We all have been idiots, I would guess, at one time in our careers. Yet, Ms. Ginger, it is those who learn and evolve that become the institution. You, I would trust with my family any day of the week, Ginger Wilcox is a True Real Estate Professional!

Thank you Suzanne!

I have plenty of it Tom:-)

Now that is an excellent comment Mr. Geary!!!

Margaret - In the end, I'm sure that will be the case.

Suzi - Nice animation:-)

Andrew - I don't say this often, but my guess is that you have a very high I.Q.

Shannon - Thank you much, I appreciate that stuff.

Susan - I appreciate that you have that take, you represent the type of people I like to work with.

Sardi = Suck up...

Susan - See above comment, but thank you:-)

I loved playing Wiffleball Jeff & Laura. I could throw one mean curve:-)

I don't think Realtors are idiots, but they definatley think too far ahead.

10/04/2007

Delete Report as Spam

I don't think Realtors are idiots either, some of the smartest & wisest people I know, hold down that occupation. Yet, sometimes....there is a learning curve we all run into.

Nicknames win games? What does that mean?

Old book Sis, it was something I read as a youngster. That was the name of one of the chapters. Perhaps I'll post about it sometime soon.

Kathy - God forbid, huh? :-)

Leo - Thanks man!

Christopher - There are so many parties involved, everything has to be pretty tight to work well and smoothly.

Jeff - We ALL can be idiots! This entity seems to practice mortgage lending as well. Go figure. In my view, a pulse on the market just won't do....your heart has got to be in it as well. To an extent you are right, I was harsh.

Rebecca - Exactly!

Lenn - I don't want your job any day of the freaking week! I try to look at the very best in any profession and know why they are there and others are not. I'd love to work with you just one time, though I fear it immensely...

Brian - Our reputation and other people's lives...yeah, there's a lot involved.

Ann - We shall see, time is the only teller.

Thank you Gena!

You said porous Gary....freaking excellent!!!

Nima - Want to create the ultimate bachelor pad? Lol!

Bryant - Indeed.

Belonger - Bachelor party....why not!??!

Christina - I would hope to and strive to be...

Renee - "It's not a game people!".............that's a sentence in of itself.

That's a very good way to do things Sharon, very good.

Great blog, I feel fortunate -- all lenders I've recommended to my buyers to share your ethics and have the buyer's best interest at heart. However, the agents (like the one you mentioned) are why (when I have the seller), I frequently check in with the buyer lender to make sure things are moving along smoothly. Although I have no control, at least I feel like I'm "in the loop" so to speak. You sound like someone I would want my clients to use!

Why thank you very much Angela May.

Good for you for sticking to your guns. You probably saved yourself a huge headache and alot of wasted time.

Thank you for that vote of confidence Jason and Congratulations on being Featured.

OCT

2007

Good post. Interesting how these things happen isn't it.

Christi - That's a fact.

William - Thank you, anytime my friend.

Yes it is Bob & Carolin, yes it is.

Jason, I can't imagine why a realtor would expect a smoke screen from you, and kudo's for NOT suppling it! I would much rather have someone tell me that they are NOT eligable then to waist everyone's time not to mention build false hope up in the buyer! We need more like you!

And you Diane...

Jason, I'm not quite sure who you are worried about insulting- the idiot agent that requested that the seller be afforded false hope with a questionable letter, or Realtors in general who prefer to throw it against the wall in a market that has seen its share of this practice in recent years. Either way, great job. Listing agents are bowing down to you at this moment for saving their sellers weeks of heartache.

Laurie - Oh, I'm really not worried about that per se, though one gentlemen above thought differently about this. Thank you for the kind comments, I wish all agents (on all sides) would take this kind of stuff more seriously and avoid incompetence and time wasting transactions that eventually just fall through.

Applause, applause for a man of honor! The agent who asked you for a pre-approval letter on sketchy clients is pretty unbelievable. Why would anyone want to actively work to find properties for people who are "works in progress"? Like my son always says, "Mom, I'd explain it if I could!"

OCT

2007

I'm taking note..... great post

I've dropped two lenders I worked very closely with... one for upcharging/overcharging a client two days before settlement on their fees "because they were harder to close after credit issues". I called them out on it, we fed each other about two quality leads per month - not worth it to me. Yes, I addressed it with them, they didn't feel they did anything wrong.

... and another for not telling the client they were "barely squeaking by" with a mortgage pre-approval but "oh! it's great" type language. Their score dropped 10 points which put them out completely 2-4 days before settlement.

Marlene - "Works in Progress" need guidance, not false hope.

Kim - Thank you. That's unreal, shame on them. A very stupid move to ruin a business relationship by doing that crap. I agree with you in dropping them, good for you!

There is a reason that prequal letters are called "feel good" letters. They are absolutely worthless and mean nothing other than a possible immediate gratification. Nothing substancial or long term. We believe in only writing preapproval letters which are actually based on reviewing documents and running automated underwriting to be sure we actually will be able to offer financing! HUGE DIFFERENCE.

I beleive that we have to be honest and direct with people. The borrowers, realtors and mortgage loan originators should not have to waste time on something which is going no where!!

Very passionate response Denise, we could use more passion AND competence in our industry. I think the tide is turning...

OCT

2007

Jason,

We as professionals NEED to continue to do this! I have been saying NO more and more to pre-approvals because I am not comfortable with the specific scenario. Hopefully soon, our pre-approvals will mean something again.

You said it Rey, I concur.

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