Murphy's Golden Rule

By
Real Estate Agent

Not to be confused with "Murphy's Law," which proposes that if anything can go wrong, it will, "Murphy's Gold Rule" postulates "He who has the gold makes the rules."

Do you ever feel that way with banks, underwriters, loan originators and appraisers?  It doesn't matter to them that buyers who ultimately will pay them interest on their money -- the source of the bank's revenue and profitability -- they treat them as if they are doing them a favor ... and only according to the bank's time frame.

In a recent transaction I was involved in, an underwriter let an appraisal sit on his/her desk for two weeks without looking at it.  When the error was finally discovered -- the day before the loan was to close and more than 40 days after the buy/sell was accepted - the lender said, "Oops, my bad" (not an exact quote) and proceeded to take another TWO WEEKS for the underwriter to review the appraisal.  Never mind that the buyer's family had taken off work and flown cross-country to help their elderly parents make the move and were stuck waiting, day after day, hearing recycled excuses and stalls from the lender.

How long would you stay in business if you treated your customers that way? 

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Rainmaker
103,007
Deanna Casalino
Remax Realty Group - Estero, FL
Fort Myers Florida Homes,
There are no words to express how badly those poor people were treated. I'm sure if you ever see they're name again you will run the other way-FAST
Mar 21, 2008 08:22 AM #1
Rainmaker
150,900
Steve Hirschler
Keller Williams Big Bear - Big Bear Lake, CA
Big Bear Real Estate
It seems like every deal is taking more time... and often it is because the lenders are sitting on files.
Mar 21, 2008 08:27 AM #2
Rainer
3,836
Paula Paquin
Exit realty Optimum - Halifax, NS
Sad, Sad, Sad ~  This is terrible!  Oh Yah ~ I have a personal Real Estate coach in your area, you might know him (John Tenza) is his name.
Mar 21, 2008 08:30 AM #3
Rainer
350,670
* Rate A Home
Rate A Home - Saugatuck, MI
Don, so true, and the sad part is, you as the agent gets the bad name for the banks inadequacy.
Mar 21, 2008 08:31 AM #4
Rainer
76,974
Chuck Christensen
Your Financial Coach - Bellingham, WA

This is a case of the blame game...not my fault! Becasue of the recent problems of the market. Most underwriters are doing appraisal reviews. Since it seems to be common practice...the Loan Originator should be asking for a review as soon as the appraisal is in. The underwriter didn't see the file till it came as a package and then saw the appraisal...the appraisal must have been questionable, so the underwriter sends it for a review...2 weeks is the normal time frame with most lenders. The underwriter usually does not do this review...it goes to a specialist.

Your assuming that a customer is going to keep that loan for 30 years and pay all the interest and make an invester vedry happy...it doesn't happen...most notes are sold within 30 days...even before signing if it is with a bank...they don't hold on to the paper...the sell it as quick as they can to free up cash. Because of WAMUs investigation of appraser abuse and Countrywides investigation for Securities fraud. Everyone is reading the fine print a lot more closely.

The rules are in black and white. It is up to the Loan Originator to make sure that everything is in the file in a timely matter. With banks...the loan originators are more like input operators, and their computer doesn't tell them this extra information. They get paid an hourly rate, plus bonuses, with benifits...if the loan falls thruogh...it doesn't matter...the fulfilled their quota when the loan came in and they submitted it. Loan Originators that work for Mortgage Broker usually always work on commission...so if they loose a loan...they don't get paid. Your Loan Originator was passing the buck and the blame. 

Mar 21, 2008 08:35 AM #5
Ambassador
2,475,445
Steve Hoffacker
Steve Hoffacker LLC - West Palm Beach, FL
Certified Aging In Place Specialist-Instructor
Don, you ask "How long would you stay in business if you treated your customers that way?" Unfortunately some lenders don't think they have to worry about that. Now if we could just some other way to get financing.
Mar 21, 2008 08:37 AM #6
Rainmaker
387,816
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!
Don, I had never heard of Muphey's Golden Rule.  It is perplexing sometimes what happens in the response from banks on some transactions.
Mar 21, 2008 12:55 PM #7
Rainer
32,082
John Egan
LoFaso Real Estate Services - Brunswick, OH

It's amazing what this mortgage companies do. I some times wonder why we put dates in a contract if they aren't going to be followed! Last time I looked our contracts didn't say closing to be on or about at the discretion of the mortgage company

 

Jack,

Mar 21, 2008 10:47 PM #8
Rainer
6,592
Jane Cruder
Northside Realty - Raleigh, NC
Johnson, Raleigh NC -Broker Assoc
I am familiar with this scenario myself.  That is why I favor a particular lender that I have used for over 10 years now.  There is no excuse for this, and it reflects on our service.  One time, I actually went to the lenders office and sat in their office until they gave me an answer.  I think they got the point, and needless to say I don't use them.  Stick with people you know will do a good job.  (I know it isn't always possible as the buyer chooses the lender), but I try to explain the reasons why to the buyers and ask them to follow up.
Mar 21, 2008 11:37 PM #9
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Don Phelan

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