Home > Blogs > Ken Cook > Content Marketer For Hire

Four Hour Approval? Hardly

By Ken Cook

Real Estate Technology with Content, coding, marketing, host.

October 25, 2007 05:26 AM

In a time of much needed transparency and truth in advertising I would think all Active Rainers would be very cautious with the words they choose to use in advertising - especially on Active Rain. Unfortunately I see it is not so. A fellow rainer is advertising a FOUR HOUR APPROVAL. They don't exist - well, not from the first phone call.

Four hour pre-approvals, yes. Four hour approval on a conventional, FHA or non-prime loan isn't possible unless all of the supporting documentation including title, insurance, appraisal, supporting borrower documentation including assets, income and credit.

So, unless you already have the appraisal, already have the insurance with the correct loss payee information, already have the clear title and the borrower has already supplied all of the information requested in the findings either by automated underwriting engine or manually by the underwriter all you have is a pre-approval.

So while you may "call" it an approval it's worthless until there is a CLEAR TO CLOSE.

Comments(6)

Comment

Show All Comments

Sort:

Larry Bettag

Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL

Vice-President of National Production

Wow....finally the truth in the lending arena. Really happy to see some truth out there.

Oct 25, 2007 05:39 AM

Jeff Kessler

Austin Homes, Realtors www.OwnAustin.com - Austin, TX

Broker,CLHMS,GRI

I believe that. Good post Ken,

Oct 25, 2007 05:45 AM

Rhonda Porter

Mortgage Master Service Corp. - Seattle, WA

MLO-121324, Seattle Mortgage Lender

Ken, it is possible. Doesn't happen always but... the appraisal can be waived if AUS offers it. Without the appraisal being waived and supporting docs per AUS, it's just a "preapproval" at best. Oohh...and I do like to have my u/w sigin off so I have that nice "clear to close" too...so you need an underwriter who can accomodate the 4 hour turn time. Flagstar is the only company that I work with where this may be possible...but it certainly doesn't happen often enough to where I would advertise it.

Nov 12, 2007 11:13 AM

Ken Cook

Content, coding, marketing, host. - Marietta, GA

Content Marketer/Creator

Hi Rhonda! Thanks for chiming in - Even with an AU/DU/DO approval is only a conditional approval (PRE-approval) until we have the docs in hand in underwriting. So until stips are met the "approval" just a pre-approval although we do call it a conditional approval. A lot of people think "Approve Eligible" is approved. Nope, ELIGIBLE for approval. And I fully agree "but it certainly doesn't happen often enough to where I would advertise it". Even though we in the industry may discuss it as semantics to the masses who read it and see "FOUR HOUR APPROVALS" they cannot understand why two weeks later their loan is denied. It makes the entire industry look bad. Yes, the company the guy works for is a behemoth. The out lent us in Georgia 20 to 1 on owner occupied residential. But, BUT - we never used .01% truth to advertise and I bet you don't either. CAN WE HAVE A LITTLE TRANSPARENCY AND TOTAL HONESTY PLEASE???

Nov 13, 2007 01:20 AM

Ken, I certainly hope that you're not implying that I am not honest or transparent.

I agree with you that eligible/approval is not an approval until the underwriter validates the supporting documents. As I said in my comment, if you do have the required documents and you're working with a fast underwriter, you can have a true approval. I also agree that this is the exception and not the rule.

My point to you is that it is possible (but should not be advertised). I agree 100% with your message. I would bet any LO who is advertising 4 hour approvals is NOT providing the underwriting supporting docs to validate

I've closed a purchase in 4 days...I don't advertise it. Not only is it irresponsible, it's a terrible way to do a transaction. It's very difficult to provide the level of service when everything is crammed into such a short time frame. In this case, they were past clients of mine who went to the builders lender. At the signing table when they discovered prepays and other discrepancies, they called me (from their signing appointment). They provided me a full package and they were APPROVED on the spot. (We are a correspondent lender). It was a "rescue" situation.

I have recived AUS with no appraisal, W2, paystub and bank statement for purchases. I often all ready have supporting documents (usually more than what AUS calls for) when I'm submitting a loan. When I use Flagstar, they can turn the approvals that quickly. AND...the loan is fully approved CLEAR TO CLOSE.

Nov 13, 2007 01:44 AM

Rhonda - No no no! Not you - I was referring advertisers who make any statement and hope they never really have to back it up! I have no doubt that you are of the highest integrity.

Nov 14, 2007 12:11 AM

Comments(6)

Ken Cook

Recent Posts