Why is it taking my loan so freaking long to close?

By
Services for Real Estate Pros with Auto & Home & Life Insurance throughout North Carolina

Before I attempt to answer that question, interested readers should know something.  I am a loan officer by trade.  That's what they call us.  I don't particularly like that title, but what's in a name?

I don't get paid an hourly wage or a salary.  If I don't close loans, I don't make a dime.  If I don't make a dime, that means I can't eat, drink, or even sleep if I can't afford to make my mortgage payments.  That's not a sales pitch, that's a reality.  It's in my best interests to close every loan that comes under my wing.  While there are ethics involved to ensure you are doing your client right, if I can offer and do a loan for you that puts you in a better financial situation, I want to close your loan as fast as possible.  It's not only in your best interest, but mine as well.

So why is it taking so freaking long?  Good question.  Here's a few observations on my behalf:

  • More volume with less 'able and willing' people to deal with it.  Let's be honest here (I love that line:), the mortgage industry isn't exactly the most attractive line of work to get into now.  To boot, a whole lot have left it.  I'm still here because I'm stubborn and good at what I do.  Plus, I believe you have to go through hell to get to heaven.  Call me selfish, but I think my time here will work out very well in the end.  Even if it doesn't, Economics 101 has us dishing out the phrase, "Too much demand and little in the way of Supply." 
  • Front-end incompetence.  If you are searching for a pre-approval from a lender, get the appropriate documents in order before you ever even fill out an application.  If they don't ask you for such documents, they may have more ties than me.  Either that, or the final result won't be what they promised.  Do yourself a favor, get your W-2's, pay-stubs, bank statements, etc, in order.  If your loan officer doesn't ask for it immediately, ask them why they don't need them.  That will put a spark up their ass.
  • Changes.  This is a tough one.  It's hard to tell someone who is a completely competent borrower, why the area they are in or the house they chose isn't on the "I love to lend in" realm.  The only real advice I have on this one is if you are dealing with someone you trust, they will get you through the current bullshit that is going on.
  • They just don't like you.  Well, we live in a society where that is not acceptable.  Folks actually look at your loan, but you aren't nearly as personal to them as you would like.  I work for a relatively small company and see that.  I can only imagine what working for a large one would entail.  Work with an individual that you trust, that you can reach out to and at least communicate with.  There is a common thing with that, you both share the same self-interests.  He/She gets paid only if your loan closes.  You only get what you desired after paying for an appraisal, maybe an inspection or two, and actually being able to be comfortable within the confines of a few walls that aren't labeled as "Prison".
  • The Government.  Now, I really don't want to wax political or get involved in any sort of debate about policy, parties, or general ideology.  But I already have since mentioning this.  We don't need the Government in this Private Sector.  We didn't need them back then; we don't need them now.  Those of us (I include myself because frankly, this is my business) who know the Real Estate Industry also know how it is to be corrected.  Let's demonstrate how we will make sure such an extreme reaction to market won't happen again.  It's a cycle, learn to ride.

We'll reach those Golden Years, but it takes work and patience.  Why is it taking so long for your loan to close?  Because this ain't a pay-day loan, this is a roof over your head.  Maybe this is the opposite extreme of giving everyone with a pulse a mortgage, yet you know what they I say about extremes... "They are to be avoided."

 

 

 

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Re-Blogged 4 times:

Re-Blogged By Re-Blogged At
  1. Robert Kenmore 06/14/2009 11:16 PM
  2. Wayne Johnson 06/15/2009 07:02 AM
  3. Gwenn Tanvas 06/15/2009 08:33 AM
  4. Sandy McAlpine 06/15/2009 09:08 AM
Topic:
ActiveRain Community
Location:
Pennsylvania
Groups:
Bloggers Choice Selections
New Jersey & Pennsylvania -- Realtors/Loan Officers/Title Clerks/Real Estate Lawyers
The Lehigh Valley Network
All About Mortgages/Mortgage Networking
Mortgages
Tags:
patience is a virtue
i hate it as well
loans not closing on time

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Rainer
42,085
Darin Osenberg
Funky Quail Vintage - Nashville, TN

J Sard-  Thanks.  Thanks, and thanks for the USDA plug.   Jim made it a resume' discussion, not me. I dont appreciate people running other people down, and when you attack our profession I will defend it.  I am tired of taking people's crap.  Jim, I did not misunderstand you, nor did I attack you in anyway or question YOUR experience.  Just cited your comments as an example for the world to see why there are differences out there.  Apologize for being long winded.  Best always, D  PS;  Will $12.00 do??
D

Jun 15, 2009 05:10 PM #105
Anonymous
Anonymous
Anonymous

Jason,

You did a fantastic blog.  I agree that you have to be up-front and on top of everything.  The challenges are in the operations area.  Underwriter's to scared to make a common sense decision or just aren't fluent in the companies guidelines (We have loan officers that are just as challenging).  Add that to processors who really don't know how to process a good old fashion loan.  They didn't have to, now they do.  I've been in all originating positions (Loan Officer, Processor, Closer and Underwriting).  As a Loan Officer your really need to know your stuff and how to anticipate what your underwriter will ask for and how to delicately inform your underwriter that they can be wrong on occassion.

How do you think the new disclosure regs are going to affect the time flows?  We call them Hera and Hoepa (Housing and Economic Recovery Act and Home Ownership and Equity Protection Act).  More government regulation.  If anyone thinks the goverment is going to step out now, don't hold your breath.

Jun 15, 2009 06:53 PM #106
Anonymous
Anonymous
Kristi May (Allen Tate Realtors, NC)

Jason, thanks for the great blog from the mortgage side. It's been quite frustrating lately getting clients qualified. I just closed a loan that was a week late simply because the file apparently sat on someone's desk until about a week before the scheduled closing! And of course this was a Large corporation. We ended up with a different LO than we started with because the original one was on vacation. It wasn't until I went to the department manager that anything was taken care of. I don't get it. I would think that an opportunity to earn income would be substantial motivation. But then again, I'm speaking from my perspective only. I'm thankfule for a few of the locals like yourself that I can trust to get the job done!

Jun 15, 2009 07:47 PM #107
Ambassador
508,165
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Donne - Here's one more.... 

Darin - I'll accept $6.00 dollars and never look back.  Some call that diplomacy and others call that giving in.  I call it my way of ending a conversation.  Everybody has a price)

Tammi & Kristi - I will try to address your comments when I'm not so exhausted. 

 

Jun 15, 2009 08:27 PM #108
Rainer
200,872
Jesse Skolkin
Independent New York State Certified Real Estate Appraiser - Fresh Meadows, NY

Jason:

"Back on the Chain Gang" and "My City Was Gone" - what a great reply to "Stop Your Sobbing" - how do you do it?

I've got to stop in to see you during my annual sojourn to Dorney Park (Aug 9, 10, 11) to get some pointers - lunch is on me.

Jun 16, 2009 10:32 AM #109
Rainer
24,609
Marie Ogle
Mortgage Processing Solutions - Spokane, WA
Contract Mortgage Processor

Ok so I really can't comment on anything that hasn't already been said.  I just have to say I love your style.  I love your ability say it like it is and that your not afraid to do it.  You make me laugh maan.

'but shit happens and we have to remember where the toilet paper is.."  I am stocking up.  Glad to know it's not just me.  Unfortunatley for us all I am not alone.  That should probably make me feel better but it doesn't

Jun 16, 2009 01:23 PM #110
Rainer
107,667
Karl Peidl
Moorestown, NJ
Accredited Loan Consultant

Jason, you make some great points.  Your first point is my favorite.  We (loan officers) seem to take the blame when something unavoidable or unforeseen delays or kills a deal.  Most customers and Realtors seem to not know, realize, or care that we do not get paid if a loan doesn't close.

Jun 16, 2009 01:37 PM #111
Rainmaker
138,418
Paul Silver
Focus Professionals, Inc. Rhode Island Real Estate - Newport, RI
Rhode Island full service real estate firm

We tried this without the government, and we can all see what happened... so as far as that is concerned, I must differ with you. Banks are notoriously poor self regulators, and if our banks go under, it will be much worse than GM going down... it was the freedom in the market of self or de regulation that resulted in pure greed (creativity in lending and in debt instruments) that led us here. Banks and other financial institutions have become something else entirely: Casinos.

That said, understaffed lenders, stiffer criteria, etc. have really slowed down loan closings... we see lenders that used to take under 30 days to close now taking 60 days... that is something that Realtors should understand, and should manage the expectations of their buyers, as should loan officers.

Jun 16, 2009 02:06 PM #112
Anonymous
Anonymous
Shari Kay Hunter

Jason: Wow, I thought all this struggle was due to something I ate. I guess it's an industry-wide phenomenon. Thanks for the humour! I love my clients and I hate putting them through the recent struggles. Fortunately, rates have been great. Otherwise, it's been hard to motivate them to jump through the flaming hoops. Thanks for your insights, Shari (Devoted Loan Officer in Minnesota)

Jun 16, 2009 04:31 PM #113
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508,165
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Jesse - I would love to have lunch someday down the road.  I look forward to it:)

Thanks Marie.  I do my best.  Have a great rest of the week.

Karl - When asked what I wanted as my buinsess cards as my official title, I replied, "Chaos Control or Scapecoat."  I was told neither one was appropriate for business;)

Rhode Island Real Estate - You may be right and since it is already in motion, I hope you are.  I don't mind being wrong if it is for the best interests of everyone.

Kristeen - Thank you for stopping by.  Interesting times, eh?

Shari - I hate putting them (clients) through the struggles as well.

Jun 17, 2009 09:12 AM #114
Anonymous
Anonymous
Jim Smith

To Rhode Island guy,

The market has regulated itself.  The weak have gone out and what is left is the strong and the "too big to fail".  The new requirements are a far pendulum swing from the go-go 00's.  We will swing back eventually, but right now lenders are so risk averse its difficult to do anyone with any type of marginal credit.

The really sad part of all of this is that government intervention is really going to muck up the system.  They always have good intentions, but dont understand the basic economics of how lending works.  They tried this type of thing in Georgia a few years ago.  Capping interest rates and fees.  And guess what, lenders exited the market, leaving less choice for the very borrowers they were trying to help in the first place.  That lasted about 2 years and they repealed the legislation because it was such a dismal failure.

Point is, the banks lend the money, and they know the market better than the government does.  Even in the bad times, they are still better than the government

Jun 17, 2009 09:15 PM #115
Rainmaker
91,561
Gerry Suarez Jr.
Mortgage Financial Group, Inc. - Mount Dora, FL
Expert Home Loan Advisor

Dude, great feature!

Couldn't read all the comments at this point but did have my $.02...

-Lenn- VA appraisers have 1 week per the VA to complete it or explain why they haven't. If your waiting 10 days to bitch your waiting too long-:-)

-I didn't see anyone mention the main reason I see for delays- increased scrutiny, literally. U/W's that used to handle 10 files a day are doing 4-5 because they have to run everything thru a fine tooth comb. Look for this all to change in about two months though, once that refi clog has been expelled.

-I resent D-Money as your USDA guy! Hell in Wisconsin I'd have Bucky do anything for me but in Florida I want to be your USDA guy! No more cheat sheets for you! :-)

Great post Sardi, as always. Your eloquence knows no bounds!

Gerry Suarez, Jr.

Your FHA Loan Pro!

Jun 18, 2009 10:07 AM #116
Rainer
107,667
Karl Peidl
Moorestown, NJ
Accredited Loan Consultant

There is a sign that hangs on the wall above my desk that reads "fire extinguisher - do not block".  I'm really not sure how it got there or how long its been there; however I dare not touch it or move it.  I find it quite appropriate.

Jun 20, 2009 10:12 AM #117
Ambassador
508,165
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Jim Smith - Well damn man, you sound like you know what you are talking about.  Your second paragraph works wonders with me.  Your third paragraph sums things up quite nicely.  I wish I was so concise.

Suarez -  Post more, ass.  This community needs your knowledge and input.  As far as D-Money, screw him.  Your my USDA Guy, until I talk to Darin again.  I'm playing you guys.  Consider me your Mortgage Slut.  In all seriousness, thank you my man. 

Karl - Chaos Control, I see.  That's damn appropriate.  While I don't want to see that sign, I may have to borrow yours.  You game?

Here's my song to the whole industry.....

Jun 20, 2009 07:34 PM #118
Rainer
107,667
Karl Peidl
Moorestown, NJ
Accredited Loan Consultant

Sorry Jason, I think the sign needs to stay where it is.

Dirty Dancing?

Jun 24, 2009 01:25 PM #119
Anonymous
Anonymous
Home Buyer, Schuylkill Co., PA

From someone trying to purchase a home, the frustrating part is not being asked for additional items. It is not hearing anything at all. We went with a LO that is in the same office as the sellers agent and our agent, thinking it would make everything easier.  Boy, were we wrong.

The LO has never returned a single phone call or e-mail. We were supposed to close on 6/16 that was postponed to 6/30 and now to 7/10, this would be fine if we had a clue as to what the hold up is.  The lack of communication from the LO has been very frustrating. Finally, went to the office and sat and waited for the LO a couple of days ago and he stated that his has a loan commitment letter that we are still waiting on the appraiser to do a final walk through. Our fear is that the appraiser did the walk through and e-mailed the results and our LO doesn't know how to check his e-mail.  He's a nice guy and if he would keep us updated we may not be so frustrated with the process.

I still don't understand why the process is taking so freakin long. What comes next? I wouldn't want to be a Realtor or a Loan Officer and deal with irritated people, so we are trying to display patience, it's just not easy.

 

 

Jul 02, 2009 08:33 PM #120
Ambassador
508,165
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Karl - Sorry; I make somewhat interesting references in my musical selection.  I'll leave it at that:)

Home Buyer - You just nailed the easiest problem to fix.  I don't understand that crap either.  Lack of communication is absolutely ridiculous.  Guess what, I see it all the time and still don't understand why.  I don't care if you've been in this business thirty years, know all the signs of where interest rates may fall within the next few days, or have an avid love affair with the Underwriter... the bottom line is that it seems the folks you are working with are dropping the ball in the simplest version of doing business... communication.  Kudos to you for practicing patience.  I'm in the industry and if it were me, I'd be up their ass so far that Popular Toilet Paper Brands may issue me a lawsuit... or a job opportunity.  This may mean nothing, but give me a call if you want.  You're already on board with them, but maybe I can make the experience a tad bit more appealing.  Every once in awhile you consult someone because you like them, are related to them, understand them, or just feel its intrinsic enough to warrant action.

Here's my cell:  610-653-0317...

No fee, that's free.  Just remember me when your handing out names...

 

Jul 02, 2009 09:43 PM #121
Rainer
26,616
Michael Rohde
Sunstreet Mortgage LLC. Licensed Mortgage Professional - Tucson, AZ

Well Said, I know it's tough out there and truth is no one wants to say no. We want to make every loan we have an opportunity to take in. Unfortunately there are too many ways to crap out right now. Good Blog.

Jul 30, 2009 05:18 PM #122
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508,165
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Grazie, Michael.

Jul 30, 2009 09:20 PM #123
Anonymous
Anonymous
sara

I'm sick and tired of this whole "closing" crap!!  I made an offer mid March...it was accepted 36 hours later....went for my loan, got the appraisal, inspection....and have a credit rating in the 800's!!!  It is now JUNE and all i keep getting is the run-around.  Still NOOOOOOOOOOOO closing date, and all i keep hearing is, "we are waiting for the underwriter to get back to us"!!!  WHAT?????  I call every day and talk to my mortgage lender and loan officer....and i hear "Im trying"!  I would like all my money back, my earnest money and all the money I put out for the inspection and appraisal.  This sucks!  It sure has made the home buying process horrible for me.  AND THIS IS MY FIRST HOME!!!  I give up!

Jun 01, 2011 02:09 PM #124
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