How Long Has This Been Going ON, that I still haven't received my commitment letter. (please click on the link for some satire)
My reasoning for that particular song? I just received this comment the other day on another blog of mine. - "Just this week I had a mortgage guy tell me that the mortgage companies systems were down for the last 3 days. We should have had the commitment three weeks ago. Since when did, "we are busy" become an excuse that is acceptable?"
3 Weeks ago? That is UNACCEPTABLE and usually is a major red flag. Why is the borrower still with this company? Should the realtors be intervening and asking for other loan officers to review this? In my opinion, Yes, very much so.
As the mortgage business picks up for many lenders, many time deadlines are being extended or missed. One issue that I am finding out as of lately is that the commitment letter is not being received on time.
Keep in mind, many companies processing time is a tad longer, but most importantly, their underwriting times have doubled with many lenders. Bank of America and Wells Fargo are now saying that it will take 60 + days to close a loan. I know some smaller lenders that I have friends at who are 10 - 12 days in underwriting. Luckily, at Infinity Home Mortgage, at worse case, we are at 5 - 6 days in underwriting.
Commitment Letter- Form letter from a lender stating willingness to advance funds to a named borrower, repayable at a specified rate and time period. This is a common notice in loans that are real estate secured, such as home equity lines of credit and second mortgages, subject to an escape clause allowing the lender to rescind the agreement in event of materially adverse changes in the borrower's financial condition. (from www.answers .com)
As many of us know, time is money and so is your commitment letter being delivered on time. Why do you think it's in the contract? Do you hold contracts to its legal definition? I am hearing more and more stories that commitment letters aren't being received on the time that is designated on the agreement of sale to purchase that home, let alone that some settlements are being delayed or denied at the very end. I digress, because that is another blog for another time.
Are there lenders that just don't pay attention to the commitment date? YES ... But can this just be the blame of the loan officer or the lender? No, not at all. Yes, I will take blame when blame is my fault. But we also need the help of the realtors and even the help of the buyer. Here is why :
Helping Hands - Team Work: Bridging the gap per se to a successful closing for the buyer. Communication from all parties, good or bad.
Realtors, are you setting your sellers expectations too high? Possibly promising quick settlements just to get the listing? Or possibly writing into the contract a quick commitment date that might not be realistic?
When a buyer has an offer that is accepted, do you get a hold of their lender to see how quickly this can happen? It takes 5 minutes or less to make this kind of effort, because a pre-qual or pre-approval letter doesn't always tell the full story.
Buyers, do you switch lenders in mid-stream? I have 3 buyers right now that applied with someone else originally and have switched in the middle for various reasons. I am glad that they chose me and I love the challenge, but it can be very stressful.
CONCLUSION : How important is that commitment letter? Very important and more than what many think. There are actually legal ramifications. Secondly, deal with a loan officer that just doesn't make false promises. Keep in mind, you can interview them as much as they interview you to see if you can qualify. What is ample time to get a real commitment out without many conditions? If the commitment letter is delayed for a few days, but it seems to be a reasonable excuse, just stay on top of your lender. If it continues as it did with the realtor in my opening statement, run for the hills and seek help from another loan officer. I am not kidding on this one. It's one thing to give someone the benefit of the doubt, it's another to keep hoping and praying. Or just for the fact that new excuses seem to keep popping up. Just keep all of this in mind.
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Experience & Knowledge at its BEST !!!
For more information on FHA loans, please go to this link. The FHA Expert
For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!
Copyright © 2009 by Jeff Belonger