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What's taking so long???

By Charlotte Home Loans Your Charlotte Mortgage Lender

Mortgage and Lending

March 21, 2008 02:22 AM

Traditionally, you could put 30 days on a sales contract and have plenty of time. But be aware of a growing trend... extended underwriting turn times.

On average, most lenders are experiencing 7-10 business day turn times on FHA mortgage submissions. This means that it can take up to 2 weeks from the date of file submission for an underwriter to actually get to and review the file. This is due to the overwhelming demand on the FHA mortgage process.

With the economic stimulus package's increasing of the FHA loan limits, many people are taking advantage of the great FHA mortgage rates. Add to that the increase of "manually underwritten" loans due to the subprime implosion and you have a steep increase in FHA submissions and lenders scrambling to keep up.

While I am still getting Charlotte FHA mortgage loans closed in an average of 30 days, I still recommend that buyers and Realtors give a little extra time in the contract just in case there are delays or a big surge in submissions. This can help prevent issues in missing expected closing dates.

For more information on Charlotte FHA mortgages, visit EdNailor.com

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This information courtesy Ed Nailor

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Naoma Doriguzzi - Virginia Beach, VA

I agree! I heard that here they are getting about 50 -60 govt loans a day... so there is definitely a demand for those loans. but it is worth the wait!

Mar 21, 2008 02:31 AM

Chuck Up

Sierra Pacific Mortgage - Michigan City, IN

I think that it depends on what lender you are using. I had not heard of the turn times that you are getting, but I was at 2 weeks out at some of the ones that I was using.

Mar 21, 2008 02:44 AM

Charlotte Home Loans Your Charlotte Mortgage Lender

Charlotte, NC

Indigo: Government loans (FHA and VA) are getting hit with increased turn times. Conventional conforming loans are around 24/48 hours on turn times, but with all the changes to standard confroming programs, there are not as many borrowers qualifying for conforming loans... hence improved turn times.

If there are any lenders out there not experiencing longer than usual underwriting turn times in the FHA arena, its because they either just got approved to do FHA (red flag) or they have increased their rates to slow submission (why submit to them?)

This should not be a big issue for any deal, just something people should be aware of. While the underwriting is going on, there is plenty of time to process the other aspects of the loan. Unless underwriting asks for something out of the ordinary, one should be able to provide most items to the underwriter almost immediately after approval for a final clearing to close the loan.

Mar 21, 2008 02:52 AM

Don Draughn - Mortgage Professional

High Point, NC

This is unbelieveable. I have experienced it as well. I have three files at Citimortgage that I submitted in the first part of Feb that still have not been underwritten.

Don... CITI is currently running at 21 days! They are swamped!

Mar 21, 2008 02:53 AM

Andrew Mooers | 207.532.6573

MOOERS REALTY - Houlton, ME

Northern Maine Real Estate-Aroostook County Broker

I have found that if you put a longer close date, attorneys, banks, etc sometimes see that, say "we got plenty of time on this one" or put effort into the ones that are on fire and going to blow apart because of natural delays. A good broker coordinates and makes sure all the players are playing...not pushing one part of the sale at a time. That is what eats up time...one part of the bank process at a time and no coordination!

Mar 21, 2008 02:56 AM

Jim Fischetti

The Fischetti Group/Keller Williams - Wake Forest, NC

Ed,

As a veteran of 25 years I remember when it took 90 days to do a FHA loan. And some people think those are the "good ole days".

Jim in NC

Mar 21, 2008 03:04 AM

Jim: Thank you for that perspective. It is funny how we get used to certain things. It wasn't that long ago that a 7.5% rate was fantastic. Now the idea of a 6.5% rate is highway robbery!

We have been spoiled too long it seems. However, while it is there to take, people need to take advantage of it!

Mar 21, 2008 03:08 AM

Kris Wales

Keller Williams Realty - Lakeside Market Center - Macomb, MI

Real Estate Blog & Homes for Sale search site, Macomb County MI

The last 2 FHA transactions that I worked with recently had 3-5 day turnaround time in final underwriting. Surprisingly VA had a 48 hour turnaround. I do expect those days to climb a bit though as FHA and VA both are being utilized as the "program of choice" more and more lately. If agents prepare for this it is a simple thing to extend closing to 40 days instead of the typical 30.

Mar 21, 2008 03:56 AM

What's taking so long???

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