Debauchery Soup

I had one of ‘those’ days at work today.

My frustration level was at a Spinal Tap ’11’ and my attitude was beyond help from chocolate.

I spent the better half of the day trying to find a solution to a problem without having all the information from the lender we were brokering the loan to – and a dozen emails later – ended up solving it.  Not without leaving some wreckage that sat uncomfortably in my stomach like a swallowed anvil.

I don’t leave anvils in my stomach anymore.  I go to great lengths to remove them, and rewind – with admissions and apologies and humor, until my stomach and conscience are light.

In this case, I called the Account Executive and just said, “Oh my gawd – I sound like such a bitch in my emails.  I’m so sorry.  This loan has been a comedy of errors all day – only, not funny.”

Bottom line – I spent hours going back and forth with a lender trying to ensure that documents would be issued, signed and received so that a loan could fund on time.

I’ve been meaning to write a post about work, and I KNOW people who are in the process of getting loans are going to search some of the questions I’m going to answer here – so, let’s just do it.

Public service if you will – with a side of ‘trust me, you’re only seeing the tip of the iceberg when you are getting approved for a mortgage.

I’ll start with – I love what I do.  I love taking information, sorting it – making sense of it – processing it and presenting it – and the icing on the cake – getting the thumbs up from the underwriter and requesting closing docs.  Being a part of someone obtaining a home is rewarding as hell. (Emotionally)

I tend to get attached to the customers.  I fight for them behind the scenes and bond with them in person.

I have customers whose loans closed years ago that still email me or call, just to say ‘hi’. 

I have been a loan processor (not to be confused with a loan officer) for almost 15 years now.

A lot has changed since the lending debacle in the late 90’s early 2000’s – and yes, we get frustrated with some of the new rules and regulations too, just like you.

I’ll just get right to the most frequently asked questions and shed some light for those of you searching for answers.

“What is the rate today?”

First of all, a loan processor isn’t licensed to technically answer that question.  We know – but we can’t be spouting off rates on behalf of the loan officer. I also can’t know what YOUR rate would be on any particular day without knowing more.  Like, what kind of loan are we talking about?  Conventional?  Government?  How much money are you putting down?  (LTV, or Loan To Value) What is your credit score?  Is it the home owner occupied or non-owner occupied?

“I saw on TV/in a mailing/on the internet a rate much lower!”

You saw a rate based on none of the above, that would be unique to your situation. 

“Why is the rate on my Truth In Lending higher than my rate?”

It’s your ‘APR’ annual percentage rate.  It takes into consideration the total cost of the loan and represents it as a percent.  It’s so you can shop around.  If that APR is a lot higher than the rate quoted – then you know you’re being charged a bonkers amount for it.

“If I sign these disclosures, am I obligated to the loan?”

Nope.  Nothing you sign upfront obligates you to continue with the loan.  Sign away.  We have to disclose information to you w/in a certain time frame by law.  We can’t proceed without proving we have.  You signing them, is proof we did.

“I’m approved now – why are you asking me for more paperwork??”

You’re never actually ‘APPROVED’ until all conditions have been satisfied.  After we’ve submit your initial loan package to the underwriter – (application, disclosures, supporting documentation) they issue a ‘conditional approval’ based on information provided.  If you’ve got a great processor/loan officer – there shouldn’t be many conditions.  We usually know what they’ll want to see.  But, if something catches the underwriters eye that needs more explaining, they’ll add that to the conditions.

“Why do you need my bank statements? “

Not only do we need them – we need ALL pages – even if it’s a page that says ‘this page left intentionally blank’.  2 months worth please. There were shenanigans in the ‘lending debacle’ days.  Pages left out on purpose – lines whited out … information altered.  Bottom line though, (for income, credit and assets) you were approved based on the information provided on your application.  Now, we just need to prove that information is true.

Which leads us to:

“Why do they care about a large deposit?”

A few reasons.  Mostly though, because if you suddenly deposited $10,000 recently – the underwriter has to make sure it wasn’t a loan.  If you borrowed money, a fair assumption is that you have to pay that money back.  You’re approved based on your credit and DTI or ‘Ratios’ (Debt to Income) so if there’s a debt that hasn’t been included on your application, it’s got to be added in.  Also, since 9/11 the Patriot Act requires large deposits be sourced.  Want to make sure you’re not money laundering.  I know, I know – but this is not our rule – we have to follow it though.

Don’t take it personally.  Everyone get’s to source their large deposits.  You’re not being picked on.

When it comes to sourcing it – we need to see where it came from, why it came from there and how it landed in your account in black and white.

The file has to be able to speak for itself, without the benefit of your voice or ours.  Anyone should be able to pick up your file and thumb through the pages and nod and say ‘yeah, that makes sense.’ (*No, not ‘anyone’ IS looking at your file – just making a point.)

Paper trail, paper trail, paper trail!

“Why do you need to know about inquiries on my credit report?”

Bottom line, because you may have just opened an account that isn’t appearing on your credit report yet.  It could be that new.  And, as we’ve covered – your debt to income ratio plays a large part in whether or not you’re eligible for a loan.  Gotta make sure you have enough remaining income to actually pay the mortgage.

“What’s taking so long??”

A lot goes on behind the scenes.  There are variables we have no control over.  Appraisers – we can’t even talk directly to them anymore!  Once the appraisal is done, an Appraisal Management Company reviews it to make sure no revisions have to be made before it’s released to the lender.  Title items – we need preliminary title reports, closing protection letters – estimated settlement statements.  Lenders – we have to wait in line too – once we submit your loan, we wait.  Once we submit your conditions, we wait.  We also wait on you for those initial disclosures or for the conditions requested.  Try to get those conditions all at once, we can’t piece meal the underwriter.

Also, while I promise I will treat your loan as if it is my only one – it’s not.  There are only so many hours in the day – in our profession, we do try to cram more hours in.  I come in early every day – and eat lunch at my desk, as do others in my field.  (Seriously … we DO care.)

Once everything is cleared – we request documents – and again … wait.  For the closer/funder to draw the documents, the escrow/title to schedule an appointment etc.  For overnight delivery to get the documents where they need to be and for the documents to be reviewed and the funding/disbursement of funds to be arranged.

Trust me, we want to close your loan as much as you want it closed.

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A lot of work goes into a loan.  There are files I need to pick up using both hands they’re so pregnant with paperwork.  Files that make me want to scream, files that I think about all night after I go home – files that I try not to bother you for anything on … I really do!  I’m on the phone, or emailing the underwriter trying to find any way to NOT have to ask you for something I think I can resolve on my own. 

There are times your that loan almost doesn’t make it – then we come up with something at the last-minute, and you will never know, because we didn’t want to worry you –  there are files that make me want to walk out the door, never to return.

But return I do.  And when I see you picking up your keys, (which isn’t very often – we’re sort of forgotten about after the signing) my heart wants to burst! 

Some final thoughts: You’re buying a home, or, perhaps investing in real estate for your future.  What bigger purchase are you going to make?  It’s emotional, I know. I take it very seriously and I’m rooting for you. 

Also, rates are still historically low you know … even though they’ve gone up.  I remember when ARMS (Adjustable Rate Mortgages) STARTED at the fixed rates available today!  

As for the conditions – I like to tell my customers, “Think of the underwriter like a toddler in the ‘why’ phase.”  That seems to help when it comes to knowing how much to provide when it comes to conditions.  (We go through it – we’re not going to send them anything that’s not necessary or will raise an underwriting eyebrow.)

And hey, realtors, loan officer, processors … be nice to the underwriters too – they have guidelines they have to follow!

It’s their arse on the line if they didn’t do their due diligence and the loan can’t be purchased after it closes. 

You’re working with real people – not robots – and they ALL want your loan to close.  We’d be out of jobs if we didn’t close them.