Is that pre-qual worth the paper it is written on?

By
Mortgage and Lending with Corridor Mortgage Group 410-960-2061 NMLS 196068

I was inspired to write this post after reading Jesse Clinton's post "I'm sorry, what did you just say?"

The mortgage market is changing daily.  It used to be pretty easy to qualify a borrower and even when it took a while for them to find a home, we'd be confident in the letter we wrote.  Now, we ask the buyer's agent and the borrower to contact us PRIOR to writing an offer to we can double-check/double confirm the buyer's information, to make sure nothing has changed. It only takes a few minutes, but can mean the difference between closing and not closing.

When we work with a buyer, we always ask to see as much information as possible prior to writing a pre-qual letter.  We can always get updated income/asset information when there is a contract.  Loan officers can run the loan through DU (Desktop Underwriter) to determine an approve/eligible loan.  Some loan officers don't want to "waste" the $15 to run the buyer's information through DU.  I would rather spend that money and know where my borrower stands, then guess based on non-verified information.   Having many years in the mortgage industry, we also have a pretty darn good idea if we don't have a desktop approval, that we have the information necessary to get a manually underwritten loan to the closing table and will write the letter accordingly. 

Mortgage rates can change several times a day now.  Rate can truly make a difference in a qualified buyer and a non-qualified buyer.  We recently had a buyer that if the interest rate was 1/8 percent higher, he went from approve (objectively-through desktop underwriting) to refer (requiring an underwriter to subjectively determine this borrower's qualification). Knowing that allowed us to keep an eye on the borrower and the market.  He moves in this week!

Mortgage Programs are changing daily as well.  For example, if a buyer was qualified for 100% financing just a few months ago, those programs have all but gone away now. Stated income loans are fewer and farther between.  Sometimes the lender program (or even the lender) under which the loan was originally  approved has gone away. A few dollars less in a checking account or a new big-screen television can truly make a difference. (On a side note...Why do folks buy big-screens while shopping for a house?  Not only can that purchase negatively affect your credit, you have to MOVE that big-screen when you find the house!)

We have had realtors that send us a buyer for a pre-qual and then get upset when we tell them that it is probably not in their best interest to purchase yet, but if you do this, this and this, you will be ready in 6 months (or a week or a year!).  I don't want to help someone get a home and then have them not be able to afford it just months down the road! I believe that is part of why the country is in the mess we are in right now.  If everyone does the right thing by the borrower  everyone wins in the end!

Realtors may want to consider requesting the buyer (with their approval of course) be double qualified through your trusted loan officer/mortgage broker. If you have a listing offer with a weak or old mortgage letter (even a few weeks can be considered old in this market)  request that it be updated or verified.  Sometimes the buyer's loan officer will balk at having another loan officer involved. If so, have them re-verify the facts and give you a pre-APPROVAL letter with more meat!  It gives both the buyer and the seller peace of mind and you don't have to re-list when the financing falls through at the last minute.

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Warm Regards,

Bridget McGee  Maryland Mortgage Mama  NMLS# 196068  Corridor Mortgage Group.   410-960-2061 EHO   bmcgee@corridormtg.com or marylandmortgagemama@gmail.com

 

If you are considering purchasing a home in Maryland and want to be sure you are mortgage ready, my brother Tony and I will be happy to help! We help to make the mortgage process a pleasure! 

If you already own your home, we are happy to provide a no-cost mortgage review to help you to determine if refinancing may be in your best interest.  Please contact me at 410-960-2061.

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Ambassador
448,176
Paul McFadden
Janitorial. Kent, WA.
Environment Control

Great post! The mortgage lenders that do what you do will be successful in this day and age. Take care.

 

Paul

June 21, 2008 09:31 AM
Rainmaker
295,926
Bridget McGee
Maryland Mortgage Mama NMLS#196068
Corridor Mortgage Group 410-960-2061

Paul, thank you for the kind words.  I have been to your blog and it looks like we have the same philosophy!  Keep the faith!    

June 21, 2008 09:57 AM
Rainmaker
110,439
Lewis Poretz
- Mortgage Branch Opportunities - Nationwide
Meadowbrook Financial Mortgage Bankers

Great Post Bridget!!! It is all so true....  Real estate agents and mortgage brokers have got to communicate now more than ever. Borrowers must be hit over the head time and time again so they clearly understand the loan is dependent on.............   everything these days are pretty cut and dry

There is no reason every mortgage originator is not a professional. There is no reason they don't know their products inside and out. Really, after VA, FHA, USDA and Fannie/Freddie   what else is there????

June 21, 2008 10:18 AM
Anonymous #4
Anonymous
Anonymous

Thanks Lewis, By the way, I heard one of your radio ads a while back, can't remember what station, but I recognized you from A/R. 

Unfortunately I think a lot of originators got in the business during the "boom".  Many were just order takers, not sales people. It was a no-brainer for folks to lower their rates.  Some originators are now struggling to learn their jobs. and too many haven't got the education, or folks they can go to for answers, and some just don't care to learn.

June 21, 2008 02:48 PM
Anonymous #5
Anonymous
Anonymous

Yeah Bridget  that was me...   probably 100.7 the Bay or 103.1 WRNR or WBAL

I just keep plugging like eberyone else.... i choose to convert any profit i may have back into branding the name and branding the name over and over....   it's working because people like you tell me they hear my spots all the time......   but don't read into those ads too far....   every single deal means as much to me as it does to you and everyone else.......

how is business for you?

June 21, 2008 02:54 PM
Anonymous #6
Anonymous
Anonymous

Lewis,  Since we do the great majority of our business by referral, we are doing taking care of our clients. We are also expanding our Realtor relationships.  Good Lenders will survive!

June 23, 2008 06:49 AM
Rainmaker
110,439
Lewis Poretz
- Mortgage Branch Opportunities - Nationwide
Meadowbrook Financial Mortgage Bankers

WOW -  what's up with the shamless self promotion???

June 23, 2008 12:43 PM
Anonymous #9
Anonymous
Anonymous

Bob, Thank you so much for your insight on the post. 

Oh, wait, there was no insight, just an ad....Maybe you want to do a little more research into how Active Rain works.  Good luck and Happy Reading!

June 23, 2008 02:00 PM
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Rainmaker
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Bridget McGee

Maryland Mortgage Mama NMLS#196068
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