Why A Lender Pre-Approval Could Be Worthless

Mortgage and Lending with All Western Mortgage Broker # 14210

David has brought up a valid point for anyone that has been in the Real Estate business for any length of time. I have received calls from Realtors wanting to save a purchase because the pre-approval that was previously been provide by the lender was unable to close.   

Original content by David Krushinsky NMLS 1779290

I received a phone call today from a real estate broker that I have worked with over the last few years.  I have some very loyal clients that I've done many loans for when they have purchased homes in PhoenixPhoenix Home MortgageThese clients actually found her after I had pre-approved them.  They have purchased a few homes with her, where I provided financing.  Her and I get along really well and I enjoy working together.  She called me today about a client she had previously referred.  The conversation started like this: 

Hi Dave!  You remember those clients I referred to you that where moving from Texas to Arizona?  You spoke with them and took their information over the phone.  You also asked them to send you paystubs, so you could verify their income.  I had one of my agents take them out to look at homes.  They didn't want to send their paystubs, so she referred them to another lender that did not require them to issue an pre-approval. 

I didn't have a chance to do the loan..... because I asked for paystubs to verify they were qualified???  Why would any agent not want to know that their clients were in fact qualified? 

Well Dave.. they put an offer on a home and it was accepted.  We ordered the termite report and it came back 4 weeks ago.  Now we are ready to fund, but the lender is telling me she can not fund because they do not have a clear termite report.  It has "water damage" listed as being on the property.  Have you ever had this problem? 

Yes!  Yes, I have and I would have prevented this from being an issue about 3 weeks and 6 days ago by simply reviewing the report when it was originally completed.  So, I tell her how we worked around this issue on a transaction we had the same problem on a year ago.  

It's a double edge sword.......Ask for too much documentation and your buyers go to someone else.  Don't ask for enough and your transaction falls apart at the 11th hour.  I would prefer to lose the buyers and keep my integrity.


About the Author

My name is David Krushinsky and I am a Phoenix mortgage specialist that is truly passionate about my profession and the result is that nearly 100% of my business is by referral from satisfied clients, trusted financial advisors and the most experienced REALTOR®'s in the Phoenix area.
Questions? Call 480.339.1566 or Visit My Website

Posted by

         Kenny Salame                                                                                                  Equal Housing

Kenny Salame
Senior Loan Officer
All Western Mortgage Inc.
8345 W. Sunset Rd.
Suite 380
Las Vegas, NV, 89113
Mobile: 702--506-3301
Direct: 702-947-0609
Office: 702-369-0905
Fax: 702-952-0887

Comments (2)

Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

We verify pre-approvals and Proof of Funds for Buyers interested in our Listings.  The more solid the Buyer, the more interested the Seller.

Jan 15, 2011 01:29 AM
Kenny Salame
All Western Mortgage Broker # 14210 - Las Vegas, NV
NMLS ID 313873

Tony and Suzanne I have experienced recently banks seem to issue Pre-Approvals without any income documentation. It does not seem to be as prevelent now as it was the last two years that listings would state only offers accepted would have to be pre-approved by the bank. A ten minute phone interview and you would get a Conditional Letter of Approval. Worthless.

Jan 15, 2011 03:18 AM