Thursday, 22nd of May 2008 at 03:34:15 PMOkay, so I’ve got buyers that are willing to spend some of their money on buying property that is availible in the market. This is good. But when I spend most of my time getting to know the Mortgage Borker/Lender and all of their office staff, it’s not a good sign.
After working hard to negogiate a deal we get to the point of getting finanching lined up. We send in all the paperwork and await the apprsial. Which happens to come back in support of the contract. Then it goes to underwriting, who I think has a magic program that random requests trivial pieces of documenation. This cracks me up, sometimes I have to ask: what exactly are you going to do with this document? The answer is usually it’s just something the underwriter asked for.
So this is a sign of an over conservative response to a formerly over liberal lending industry. Buyer is providing 40% down payment (yes, unheard of), has a FICO in low 800s (yes, great buyer). We’re two weeks late on getting the deal down and the latest request is, can we get receipts from the seller of the paint work and landscaping work down 6 months ago on the home. Total repair between the two, $4,000. What bearing does this have? We’re talking less than 2% value of the home on reciepts. There are days that I wish I had access to the man behind the curtain called the underwriter. I’ve got sellers ready to issue a Cure, buyers that are stressed and ready to walk and a lender that is working his way on my list of don’t want to work with.
With this last request I gave notice to all parties that I would be consulting with another lender to try and rescue the deal. This pretty much got everyone attention and things started happening and we were able to close in another week. However, the damage was done. This lender was referred to another set of buyers of mine by a builder they were buying from, to get a nice $15,000 closing incentive.
Well, I took the proactive approach and let my other buyers know of the challenges faced with this lender and we opened discussion with the builder about getting a backup borrower in place to make sure we close on time. I called one of my Mortgage Bankers and asked what he could do. We’re less than 21 days from COE. He came back with a rate that was slightly better (1/8) and closing costs that were less than the first lender. Okay, so this is a better deal and of course my buyers want to switch. A couple of calls between the builder, the lender and myself, and a couple of assuances the deal will close on time, the lender is switched.
Now this brings up that it is a good idea to shop around for a lender that will get you a good deal and one that you have a high confidence will get the job done on time with little stress. What surprised me this week was that the documents were to title over a week before COE, usually I’m calling 4 days before COE asking where are the docs. Not in this case, even before I call, the docs are there. My buyers are happy, the builder is happy, and I’m happy. What a difference a good lender can make.
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