While I was leaving the office last Friday, I received a frantic call from a Real Estate Agent asking if I have a few moments to discuss an urgent matter he was dealing with. Apparently his clients had their offer accepted to purchase a home in New Jersey, but they just found out that the mortgage broker is having an issue with the loan approval. They have been looking for a home in the area for months and are facing a firm deadline to move as the buyer graduated school and is starting new employment next month. I turned around, unlocked my office door, grabbed my processing manager and got to work.
We called the home buyer, spent almost two hours on the phone getting all of the pertinent information, and asking all the questions we needed to understand the matter perfectly. I had one final question for the buyer, and that was – “how in the world did you sign a contract if you weren’t able to get a mortgage in the first place?!” The truth is, his answer was irrelevant. Whether the mortgage broker made an honest mistake, a careless error, or a negligent oversight, the fact of the matter remained that he made decision in good faith based on wrong direction, and was in big trouble.
This story had all the quirky elements that I have seen before, although not all for the same applicant, at the same time. His credit wasn’t strong; His employment history was non-existent; The downpayment was minimal; The closing needed to be imminently. Needless to say, after another two hour call on Sunday, we were able to give them a new pre-approval, and salvage their home purchase. At least I was able to salvage some of my Sunday … that was, until I got a text from a past-client of mine who told me his brother in law was in big trouble with his pending home purchase, and needed my urgent assistance. As I told the Realtor and my new client, I take no satisfaction in seeing a competing mortgage company slip-up and have their ex-clients running to me in despair. No one is perfect. I do however take great satisfaction in listening, understanding and trying to navigate through each challenge to satisfaction.
Mortgage lending has always been a competitive business, and is becoming even more aggressive when home sales are down and interest rates are on the rise. Yet, there is an indirect correlation between the numbers of pre-approvals issued by these inexperienced mortgage originators compared to the amount of loans actually closed as presented. Simply put – just because they take the mortgage application, doesn’t necessarily mean the loan gets to the closing table as promised.
In my opinion, one of the most critical steps of the mortgage process is the comprehensive analysis which should happen in advance of any formal application. It is during this stage that all of the issues, concerns and obstacles should be uncovered. It is during this stage that your mortgage advisor should make the appropriate recommendations of best rates and terms considering your long term and short term financial objectives. Most banks, most unseasoned loan officers, and certainly almost all online “portals” fail miserably in this stage leading to a longer process, more loan rejections and inevitably higher rates and fees (if the loan can be done altogether).
Getting a mortgage is not overly complicated, but not having the guidance and knowledge of a trusted advisor at each step of the way can only lead to frustration, confusion and increased expenses. That’s something you can count on consistently with Approved Funding, where we pride ourselves on the level of sophistication of our front end mortgage advisors, and back-office personnel who are trained by me to say “know” instead of “no.” Special shout out to Adina and Michael Kirschner.
By Shmuel Shayowitz
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience including licenses and certifications as certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected].