So I received an offer on one of my listings! I should be excited right?! Well, the pre-approval letter is from a no-name broker. I called the loan officer to verify the buyer's approval status. When I asked if she could verify that he had his downpayment, she said no, but she had reviewed the credit, but not employment or bank statements. He's planning to go FHA, so I'm wondering why it hasn't been run through automatic underwriting. So then I asked who would the loan be placed with and she named a bank that historically was known for BC loans. I didn't know any of those still existed anymore, but that's beside the point. Also, the fact that this bank was involved on the other end of 2 other sales where I represented the seller and after 60 days, still no closing. We gave the buyer the choice of going through an approved lender or losing earnest money. My lender closed the deal in 2 weeks. So I called my seller to tell them the good and bad news. We got a good offer, but I don't have a whole lot of confidence in the buyer's pre-qual letter. They are going to be relocating out of the area so it's not a good idea to wing this. I feel that I have done enough FHA loans and had enough bad experiences to go with my gut. After discussing with my seller, we decided to request the buyer get pre-approved with another lender with a namesake and I gave a list of preferred lenders. We wouldn't hold the buyer to the preferred lender as long as they could be approved, but would feel more comfortable and secure moving forward if we had someone else run it through automated and give a 2nd opinion. I left a voice mail and email for the agent and haven't heard back. Would you as the agent or the buyer be totally offended? Actually, the agent even mentioned to be that she had never heard of the lender.
It is your job to look out for the seller. I personally would not want my buyers credit pulled just to satisfy the other party. That is just how i feel. But when you get a prequal from xyz company that you never heard of - I can understand why you would want to.
Not an agent, but used to be the admin manager of a RE office. I've seen some pretty shakey stuff and that was when you could get anyone approved... now with all the approval cutbacks, I wouldn't want to move the listing to AC status on questionable financing!
I think it's yhour duty to follow through with those actions in order to protect the seller. For sure need to make the pre-approval very real and legit.
The short answer is, she should not be offended because it is NECESSARY now. Granted, with a broker she can move around if a lender collapses overnight (has happened, will continue to happen) the broker should be able to get a DU approval in a very short time frame. Does the mortgage broker have a good reason for not running it through DU yet?
Also, if the person is going through a company that is notorious for their role in the subprime debacle, you have to ask yourselves if it's even in the clients' best interests to continue with them. FHA is going to be the 'new subprime' where people get taken advantage of. I know this person is not your client, but it may even work out to their benefit to get that second opinion/pre-approval elsewhere.
Stick to your guns here- better safe than sorry.
I think you did the right thing. Recently in our market area, I have seen more and more listings saying that all offers must be accompanied by a pre-approval from "wells-Fargo" or "Countrywide" or someone who is known and reputable. Again, no one holds the buyer to using that lender but as listing agents looking out for our sellers, we need to make sure that the buyer's loan is really going to close. I actually have, as part of my listing package, a form that can be signed by the seller that states that because of th changes in the lending industry, we request that all potential buyers be approved by a particular lender.
Thanks for the comments. The buyer wouldn't budge. It turns out the lender is a friend. With 47 showings on my listing and this being the first offer, the seller decided to move forward. I had the buyer's lender filled out a Lender Verification form stating credit, income and assets have been reviewed and there are no contingencies. The lender said she did run it thru automated underwriting and there are no issues. After reviewing the LV form, the seller felt comfortable moving forward, however, we did include in the counteroffer that the buyer increase his earnest money and the seller is to receive written loan approval within 10 business days with no credit or income conditions left. Obviously title, appraisel and insurance are a given, but as long as there aren't any financing issues, we are good with it. I do have a back up lender that can pick up the ball in case it gets dropped (which unfortunately has happened in the past). We are scheduled to close June 26. I'll keep you posted on how it goes!
You were working in your sellers best interest and following a gut based on previous personal experiences and presented your concerns to all in a way that showed you want the deal to suceed - your duty was to disclose concerns and offer suggestions and counters to help move all parties forward to a sucessfull transaction. Looks like from your last comment things are on the right tract.
sincerely,
Grace
Thanks Grace. We are still showing for back up offers too...just in case!
Just an update on the status of this closing that was suppose to close on Thursday. It didn't happen!! Lender would not discuss anything with me since I represent the seller. Buyer's agent didn't seen to have any info either except they have everything. We are just waiting. Well...waiting on what?!
Exactly as I predicted!! I really hope this closes, but I hate that my suspicions are on the verge of right. The buyer's contact expires on July 3.
131,844
Comments(9)