Mortgage lenders rated lower by loan applicants

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Summerlin house, Las Vegas NVThe housing debacle in Las Vegas and throughout the country is testing consumers' patience in a major way. Real estate values have eroded without mercy in many areas, to the tune of double digit percentages. Some Southern Nevada - featuring Summerlin, Mountains Edge, Henderson, North Las Vegas, Pahrump, Southern Highlands and Anthem - communities have seen drops in the 50 to 60% range. Many homeowners here and elsewhere, as a result of that, find themselves underwater, meaning the underlying mortgage is higher than the property's value. The foreclosure epidemic hasn't let up yet, either. There really isn't much to write home about.

Those applying for a mortgage loan nowadays have run into their own set of issues, largely thanks to the unstable housing market.

To approve and close a mortgage took 30 days in 2008, but this year that time span has grown to almost 47 days, asserts J.D. Power and Associates in its recent study. That is a serious jump and Las Vegas mortgage borrowers certainly can identify with it. Main reason is the added scrutiny every home loan application now receives. Mortgage providers continue walking on thin ice and are doing everything to avoid approving loans that may not work out. A half inch mortgage file can balloon into a 2-inch thick stack after all the supporting documents the nit-picking underwriter requests are in. That kind of stuff can test any applicant's staying power.

Also, home loan firms seem to have shifted some resources away from origination to deal with foreclosures, short sales and mortgage modifications. And what not. It obviously will slow down the already lengthy process even further. So, when J.D. Power comes and asks How did it go?, the consumers will first take a deep breath and then happily let it all out.

There is a way, however, to keep mortgage applicants more or less happy. It has been tested time and again and it works. It's called communication. Home loan originators, and even real estate agents, could include a brief explanation about the current thorny state of the market and the potential challenges it may present early on in the process and that would help prepare them for the journey to a satisfying closing. And a new home. 



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Esko Kiuru
Mortgage, real estate and apartment industry analyst - syndicated mortgage, housing and property management blog
My cell: 702-499-1006


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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Esko, we having been seeing longer Closing Dates in the last couple of months, but that has been because of the mad rush of first time homebuyers that were trying to Close before November 30th, Other than that we had been and will soon be able once again to Close most loans withing 30 days.

Goes to show how even the mortgage end of Real Estate can be different in defferent parts of the Country.

Nov 17, 2009 10:18 AM #1
Tom Braatz Waukesha County Real Estate 262-377-1459
Coldwell Banker - Oconomowoc, WI
Waukesha County Realtor Real Estate agent. SOLD!


Wow, that is a huge percentage drop; so right about communication being a virtue.

Nov 17, 2009 10:42 AM #2
Esko Kiuru
Bethesda, MD


Could be also that in the hard-hit areas like Vegas lenders underwrite with extra care, delaying the closing.

Nov 18, 2009 03:20 PM #3
Esko Kiuru
Bethesda, MD


Good communication certainly keeps the information flowing and prevents many problems.

Nov 18, 2009 03:21 PM #4
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