Reviewing Offers? Boy, Am I Sorry for You! AWESOME INFORMATION FROM A MORTGAGE LENDER!

Reviewing Offers?  Boy, Am I Sorry for You!     I recently had the good fortune to work with a very strong and savvy real estate agent on a difficult short sale transaction. She happened to be the listing agent, but throughout the whole process we just seemed to click --- a shining example of teamwork.   So I was more than happy to accept her request on her newest listing. Would I provide a pre-approval for any prospective buyers?  Of course I would.  We've all seen this before --- the buyer must pre-approve with a "preferred" lender as well as any other source of financing they plan to use.   I was surprised by what happened next.  I thought I’d write a few letters for a handful of buyers who had already pledged loyalty to their lenders of choice.  I’ve been on the other side of this coin myself, and I always sort of begrudged having to turn over all my hard work to someone else --- all my careful analysis, supporting letters and documentation.  Just so some other lender could try to persuade my client away?  No thanks.   But as the first files started to come in, I began to notice quite a different pattern.  These pre-approvals were suspect.  AT BEST.  Many of them had questionably thin funds to close, excessive debt ratios and holes big enough for even a post-retirement Shaquille O’Neal to drive through.  I couldn’t believe it.  Punch drunk, I tried to elicit some rationale from the “lenders,” some coaxing to help them help me.  What I got next was even more perplexing:   Scenario A:  I asked, “What PMI provider will you be using for this scenario?  It appears your factor is off?  Can I see your findings?     “Hi robert, we have not run lp or du. Dont usually for a pre qual. We are a broker so not sure which mi company our lender uses. They usually have more than one anyway and its their discretion.  They r great buyer's,  super high ficos, stable employment and good ratios. I am sure you agree its an easy loan. Thanks so much!” [sic]     Summary A:  LOL!  I’m like SO SURE you must have slept through the real estate crash landing!  OMG, I’m like ROTFLMAO that you think there are still actually easy loans!  Especially this one!  J   Scenario B:  I asked, “You mentioned you’re running this LP because the debt ratios are high.  We’ve got a 49% back end and the buyer is putting 10% down with PMI.   Are you sure you’re getting an Accept?  Which MI provider will you use, can you confirm they’ll follow your LP and can I get a copy of your findings?”   “My processor went ahead and ran it with a TBD even though we are not supposed to.  Just an FYI, she [the borrower] got a raise and promotion effective next month so the paystubs do not represent that. And since it is a Short Sale, she will have 2 or 3 paystubs by then based on when the bank excepts an offer.” [sic]   Summary B:  So let me get this straight.  You want the seller to accept your offer over all others before your buyer actually qualifies for the loan?  What about my initial question?  You were ready to submit a pre-approval to this Realtor that you knew would not work, right?  And now you want me to believe that because you’re hoping the short sale will drag out, it will give your borrower time to prove what she cannot support now?  Really?   So, agents, you are reviewing offers?  Boy, am I sorry for you!  I never envisioned helping to spare you this grief.  I always imagined the listing agent sitting on his/her high horse and flipping through the options with the seller, just coolly and casually selecting the clear favorite.  I didn’t know you had to tiptoe through a minefield of time bomb offers.   I didn’t appreciate that there was danger at every turn.  I am so happy I could be at your service and help with this process. Now I know.  And in turn, it will make my future pre-approval letters and files that much stronger.       Robert J. Spinosa Home Loan Professional BRE: 01297944 NMLS: 22343 1058 Redwood Highway Mill Valley, CA 94941 877.270.5959 Toll Free 415.367.5959 Cellular 415.366.1590 eFax rspinosa@rpm-mtg.com