My Loan Officers Pre-approval letter isn't good enough for you?

Services for Real Estate Pros with Pacific Servicing

I sat down with an old friend today for lunch, speaking with him about the state of the market. We ended up discussing a dilemma he had last week. He submitted an offer on 2 bank owned homes from 2 separate clients with a pre qual letter. He included 1st page of Ficos, Income Proof (both loans were full documentation), and copy of deposit check. Both offers were kicked back, with the Banks Agent saying they only accepted pre approvals from direct lenders. Well both loans had low ficos, and he had to use non traditional banks to complete the loan, so he couldn't get a countrywide or direct lender approval being they didn't offer the same programs. The bank said the only way they would proceed is if he removed the loan contingency completely, which is absurd. No Realtor is going to put their clients deposit at risk! He ended up losing one of the clients, and the other is currently looking for other homes.

The point of this blog is to address banks and owners ridiculous standards. Just because a buyer can not get approved with Countrywide or Wells Fargo, doesn't mean they're not qualified! I understand sellers in this market being worried about buyers qualifications, but there should be exceptions! Full Documentation, 20%+ down, etc. I think these sellers are part of the reason homes sit on the market as long as they do, they have ridiculous expectations of buyers, and lower their potential buyer pool tremendously. Forcing buyers to pre approve with "Danny" at Wells Fargo will turn brokers and buyers off to your property. Its a hassle, it sometimes takes days to get the approvals, and It's not fair to base your decision on whether to entertain a buyers offer solely upon whether "Danny" can get them approved.

So to sum up this blog, Sellers need to lower their standards unless they want their listing to sit on the market for 6+ Months. There are plenty of buyers out there, but if they have to jump through hoops they'll just move on to the next home with the easy going seller. I understand some brokers used to just slap together pre quals for anyone with a pulse and a fico score, but there still are honest hard working brokers out there who just cant take their clients to the traditional banks, and they shouldn't be punished for this!!! Loosen up sellers or plan on your home sitting on the market for a long time!

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Ryan Case - Partner

Pacific Servicing, LLC

(800) 313-9050 - Office

(951) 760-3170 - Mobile

(951) 501-2926 - Fax



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Fred Pickard
Fred Pickard Innovations Realty Inc - Hershey, PA
Hershey, PA


I don't disagree with you (and my main business is listing REO's), isn't part of the problem that lenders (including the two you mentioned) lowered their standards the last time these houses sold?

I don't work with WF, but the CW asset managers used to be able to override the lending requiremkents if you had a strong customer with one problem (low FICO's, for example).

Oct 08, 2007 10:15 AM #1
Michelle Galler
I agree Ryan! These banks wish to sell their properties quick yet they are reluctant to work with homebuyers who can not get approved with the main stream banks. Does it make them less of a buyer? NO! When the banks realize this itll help them unload their property a lot quicker!
Oct 08, 2007 04:11 PM #2
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

I couldn't agree more!  This is exactly what I was referring to in my interview with Adam Waldman when he asked what is the biggest challenge facing me in this market - and I said incompetent agents who don't realize that the economy is to real estate what the seasons are to weather.  And the same goes for sellers, including bank-owned properties.  Don't get me started!

Oct 08, 2007 10:33 PM #3
Keith Perry
Coldwell Banker - Hiram, GA
REALTOR - West Metro Atlanta
Ryan, I know and have been there. Reminds me of Sir Don battling windmills.
Oct 08, 2007 11:21 PM #4
Ryan Case
Pacific Servicing - Temecula, CA
Hey margaret! I couldn't agree with you more! Everyone wants to know why for the last 2 years California has dropped in certain areas 15% a year. Maybe it has to do with the sellers requiring ridiculous things from buyers just to go into escrow. It shouldn't be legal. I mean they require a direct lender approval yet everyone in the loan business knows you can't get a full approval these days without a purchase contract,title,and escrow. When does this end? When do they lower their ridiculous standards?
Oct 09, 2007 04:06 AM #5
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