Say Goodbye to 30 Day Escrows

Reblogger Lynn B. Friedman
Real Estate Broker/Owner with Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ...

Dear Readers -

John Meussner's thorough explanation of the TRUTH about time needed for Mortgages POST-TRID is a welcome addition to our AR Blogsphere.

If it seems I tend to re-blog John's posts often - that is a very correct assumption. Why? Because of the high quality of the information John shares with us.

 

    John Meussner  offers other important information in his posts. How about HOW TO CANCEL MORTGAGE INSURANCE, or REFFERRAL FUNDAMENTALS, or REDUCED USDA FEES.

 

ActiveRain membership includes access to so many amazing posts. I love learning new ideas and following good suggestions! Being able to increase my knowledge as often as I choose is so important to me.
All the best - Lynn

PS  If I haven't thanked you personally for reading my Blog, let me do so right now! I really appreciate your stopping by and (perhaps) commenting! L.

Original content by John Meussner NMLS #138061 MMCD #1141

Say Goodbye to 30 Day Escrows

 

     We close loans in 14 days!  You've seen the ads.  A lot of lenders in the post-TRID world are attempting to attract new business by focusing on super fast turn times.  A lot of real estate agents are seeing this.  With the implementation of TRID last October, one thing the industry seemed certain of was that escrow periods (or for non-California states, the time between execution of purchase contract & settlement) were going to increase.  

 

 Mortgage Turntimes

     Pre-TRID, 14 days was moving at lightning speed.  Post-TRID, it just isn't happening.  At least not as the norm.  So what's changed?  Little more than lender advertising, really.  "14 day closings!" should really read "14 day closings***"

 

***from time of underwriting submission, with a complete package, title & appraisal returned with no issues, borrowers available to send in any conditions within 24 hours, absolutely no holidays/long weekends, and totally inaccurate CD being issued in advance for the sake of our advertised turntimes***

 

     Before it appears I'm just sipping on haterade, I need to state that our loans here at Mason McDuffie are getting done in less than 30 days.  In fact, several of our branches average below 30 days (and the averages include 45 day escrows/settlements so you can imagine how quickly some things move), but industry-wide, it's a case not of '"if we could" but "if we should".  

 

 

     Look, 30 days is great. You get paid, I get paid, clients are happy, onto the next one, right?  But I've noticed a trend that goes far beyond coincidence in that 45 day contract periods tend to be pretty smooth sailing, everyone's relaxed, and things are generally wrapped up on schedule or in advance.  The process is good.  The 30 day contracts?  Not so much.  In our current market?  LOL!

 

Let's list some of the things that can go wrong, all the time:

- In a busy market, appraisal turntimes get extra long.  If any corrections, updates, or disputes need to be made to the appraisal, you're out of contract.  We just had a 28 day turn time on an appraisal report.  On another file, we tried several local appraisers AND AMCs, with the best quoted turn time of 22 days, and NO rush requests possible.

- Buyer is on vacation/isn't perfect/needs documents from someone else on vacation, etc.  Things come up.  Everyone is busy.  YES, buying a house once under contract should come as a top priority, but rarely is it #1 on people's lists.  There are going to be 24-48 hour delays just trying to get things from a borrower.

- Underwriting issues.  All the time, underwriters ask for explanations on items that pop up on DataVerify reports or title, or the listing agent marked a condo as a PUD in their listing and now we have to alter the process.  Again...not always the longest delays, but usually long enough to hurt a 30 day contract.

- Holidays.  Most months have a holiday.  Many have a few.  How about months like the one we're currently in, where there are 8 weekend days, and tack on a couple holidays - 30 days can disappear quickly.

- State variances.  In CA, for example, you could have clients sign closing docs on a Thursday and technically not have escrow close til the following Monday. That's 5 days of your 30 AFTER the loan process is basically completed.  Don't forget you're tacking those 5 onto our last little TRID issue...

- CD waiting period.  For 3 days after we send a closing disclosure, we can legally do nothing.  There's 10% of the contract period, gone.

 

     Issues like this come up on many transactions with even the best agents, loan officers, and prudent buyers.  It doesn't take much at all to get in the way of a 30 day settlement.  But 45 days?  That extra 2 weeks gives plenty of time for an irresponsive appraiser to finally get around to returning a report, or a title issue to be sorted out, or for a borrower to (heaven forbid!!) have a vacation planned, and for everyone to still be happy and still be on time.

 

     Sure, there are going to be times when a seller needs to sell or a buyer is on a tight time line, but 30 days or less should be the exception, not the rule.  We have 2 jobs in our industry if we want to have any longevity in the real estate industry.  One, help our clients through a consummated real estate tranaction, and two, to have them happy when they get there.  Setting the expectation of a 45 day timeline is a tremendous help with the latter.  And there's always the "...or before, if agreed upon" verbiage that fits so nicely into a contract or addendum after the 45 day expectation is set.

 

Sure, we can close a loan in well under 30 days.  But should we set that precedent?  With the current process, I'd argue that we should not.  45 days is the way to go for stress-free transactions and happy clients.

 

John Meussner

NMLS# 138061

Visit My Website!

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate Best Practices
Location:
Georgia Fulton County Atlanta Buckhead
Groups:
Active Rain Newbies
Realtors®
Atlanta Real Estate Q&A
The Lounge at Active Rain
Addicted to Active Rain
Tags:
mortgage
john meussner
trid

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
3,983,869
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

WE are still doing 30 days and sometimes we roll over a couple of days.  But the loan officeres know that they don't get my business if they are running late

Oct 04, 2016 11:18 AM #1
Rainmaker
1,519,327
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Thank you for the re-blog Lynn as I did miss John's post. Since TRID, I only had one that closed in 30 days and it was an FHA loan.

Oct 04, 2016 12:02 PM #2
Rainmaker
426,276
Lynnea Miller
Bend Premier Real Estate - Bend, OR
Premier Real Estate Service in Central Oregon

We close all the times under 30 days - with cash sales.  We are at a market with a crisis in appraisals. Despite TRID, the issue we have are delays with appraisals. All loans are taking 45 to 60 days. VA loans are taking 3  months at a minimum.

Oct 04, 2016 12:48 PM #3
Rainmaker
4,432,533
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I love the post. Thank you fo reblogging it. I hope others will read it too.

Oct 04, 2016 09:40 PM #4
Ambassador
910,812
John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

Thanks so much for the reblog Lynn, always so glad and appreciative that you found the material valuable enough to share!

Oct 05, 2016 06:01 AM #5
Ambassador
929,493
Lynn B. Friedman
Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ... - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

John Meussner 
Just keep on writin' -- LOL
Have a happy day - Lynn

Oct 05, 2016 02:11 PM #6
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
929,493

Lynn B. Friedman

Concierge Service for Our Atlanta Sellers & Buyers
Selling? Buying? Contact us now and LET'S TEAM UP for success!
*
*
*
*
Spam prevention

Additional Information