The loan process — for a tough loan, can you handle the truth?


One of the things that has changed drastically in the past few years in the mortgage industry is the speed at which things can be done.  When I started in the business almost ten years ago it took 24-48 hours just to get a credit report (that doesn’t count the 5 minutes that it took the dot-matrix printer to print it out and the 2 minutes it took to fold the pages back and forth to tear them apart and then to pull off the two little side-strips of paper with all the holes in them) — now, using the internet, it takes about 30 seconds to pull up a report.  Back in the “old-days” (ouch), the processing of a loan — verifying credit information and employment, the appraisal report, the title report — moving the loan through the underwriting review, preparing the closing documents and getting all of the documents to the closing table took every bit of the customary 30 day contract.  It is hard to imagine, but, before email, people would have to physically wait for the closing package to arrive at the attorney’s office — what could take a courier an hour or two (or more, in Atlanta traffic) now takes all of two minutes for Outlook Express (email) to pull into the attorney’s inbox.

With this exponentially faster mortgage process — credit reports in seconds, automated underwriting in minutes, and closing packages emailed at the click of a mouse — customers and Realtors alike have come to expect quick answers, quick results and quick closings.  Thankfully, most of the times, these expectations can be met.  I generally tell my clients that three weeks is the perfect amount of time for us to move through the loan process.  It gives them time to gather financial documentation and sign loan papers; it gives the appraiser a week to get his/her report done; it gives the attorney a week or so for the title report; a few days for underwriting and clearing conditions (if any); and it gives the attorney plenty of time to get the closing paperwork a couple of days early, and to prepare all of the final numbers for all parties to review.  Realistically, this process can be moved up to two weeks — or what I call a “comfortable-sprint” — if everybody moves at a sprint pace, we’ll get there fine.  In extreme cases, the loan process can be squeezed into an even shorter time-frame.

So here is the question . . . you call one mortgage lender to get pre-qualified and told that everything (as far as you can tell) looks great, “No problem,” he says, “we can get that done, no problem.”  The next lender you talk to (let’s assume for good reason) has some concerns about (take your pick) — your credit history, your debt to income ratio, the fact that your bonus income has been inconsistent, that your rent history is hard to document, about closing in 5 days, etc.  And tells you that he “thinks” everything will be ok, but the sooner he can get your loan documentation in front of an underwriter, the better.  What do you do?  Does lender #1 have a special program that simply solves the issue that lender #2 is so concerned about?  Quite possibly, yes.  Or is lender #1 trying to “sugar-coat” the situation to keep you at ease and win your business?  There is value to sales confidence, right??

The real question at stake comes from one Colonel Nathan R. Jessup, Marine Ground Forces, Guantanamo Bay, Cuba (“A Few Good Men” for those of you who apparently do not have Net Flix or Blockbuster or a DVD player or a television that has TBS and who apparently did not live near a movie theatre in 1992) . .

Col. Nathan R. Jessup:  You want answers?
Daniel Kaffee: I think I’m entitled.
Col. Nathan R. Jessup: You want answers?
Daniel Kaffee: I want the truth!
Col. Nathan R. Jessup: You can’t handle the truth!


Ok.  So maybe it wouldn’t be the BEST in customer service to approach the situation exactly like Col. Jessup.  But, here’s my point:  if you have a unique qualifying situation, or a unique credit situation, or a slightly confusing employment situation, etc. make sure that you address it in the beginning.  And don’t take “oh, yeah, no problem” as an adequate solution to what you know is a legitimate problem.  The loan process is not about glossing over things and hoping that the underwriter will still let the loan squeeze-by.  The loan process (and the role of a good mortgage consultant) is about documenting your situation, explaining why your loan makes sense (despite it’s unique _____ ), arguing your case, and fighting to help you get the best possible rate and the best possible terms for your mortgage — even if it means that getting a truthful answer will take a few extra days.


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