Life In Wake Forest NC.....

Thanks for the interesting and educational post.

Great post Nevin!  There are a lot of parties involved in a single transaction and that HUGE component is critical to the survival of the deal.

*suggesting*

Excellent outline, Nevin.

I was always taught that purchase money transactions are handled differently than refi's.  And the reasons you've outlined pretty simply above.

Happy 2011, amigo!

Nevin- Great post!  It's because of all the things that you have outlined that I often wonder why more buyers and Realtors/agents don't flat out ask an MLO they work with what their close rate is as well as what their fall-out/pull-thru rate is. 

I have rarely been asked that but will quite often volunteer it to educate buyers as well as their agents that just having someone say I'm good (typically the person who referred them) isn't enough.  I need to prove I'm good and that often means how many of my transactions am I actually closing?  The ones that get canceled - why?  What happened that it didn't close and got canceled? 

Because let's all be honest, there are more reasons besides borrower eligibility why a transaction may not close or get canceled.  Personally, almost all of my fall-out and cancellations are the result of property conditions and not borrower eligibility.  I take care of borrower eligibility long before we ever get into escrow.

Bookmarked this one, Nevin.  

You summed it up very well for the Victims of a blown transaction.  Loan Officers need to realize that people's lives are on the line, and act accordingly.

Nevin - The Beatles had a song called "The Fool on The Hill" .... May your clients and all understand that the end result requires Mortagage Pro , Like You, to make the deal go through. Else they become.... the fool on the hill

Nevin, great point!  We recently had a transaction go bad because the lender did not ask when the SS income would end.  It is ending in 18 months and as such, is not income at all.  Unfortunately 3 families moved before final loan approval (we advised against this).  Lives can be hurt horribly when anyone acts irresponsibly. 

Oh, by the way, the lenders response, "you win some and you lose some".  Acutal quote!

Hi Nevin:

You spelled it all out here...well done!

Margo - Thanks for the interesting and educational response

Andi - So true.  people get hurt when loan officers are sloppy and careless.  Thanks for the "suggest for feature"!

Jason - You were taught well.  When are you going to come work with us?

Donne - Amen to that.  I don't have any of my purchase loans denied due to an oversight or negligence on my part.  It's because even though I already know the guidelines I double check them any way.  Sometimes guidelines change and if you miss that one memo that is all it takes to lose a purchase loan and hurt a lot of people.  I guess that's why you and I are still left in the business!

Fred - Thank you!  I hope it proves useful

Claude - Thank you for the kind words.

Damon - That is outrageous! It's loan officers with that kind of attitude that make the industry look bad.  That really stinks and I'm sorry it happened to you. 

Awesome post, Nevin!  I'm writing one right now that describes the differences in lenders.  It's great information for the consumer to have at their fingertips and we can ALWAYS count on you to provide this for us!  

Hi Nevin~  It's too bad more loan officers don't think like you and Donne knudsen above!  I love her statement "I take care of borrower eligibility long before we ever get into escrow." 

Nevin~ You hit it with this one! Sometimes I have been SO aggravated! Sometimes I think that loan officers have no idea HOW much work I have invested by the time we get to that point!!!

Nevin - the worst is when financing is not approved at the end, for a reason that was disclosed and documented right up front - somebody did not do their job.  That is not forgiveable - that lender will never see me again.

Nevin - Thanks for noticing! :-)

Thanks for posting this!  We all have to work hard to make sure things get done!  remember your ABC's always be closing!

This is a hot button for me and I've encountered a few loan officers who almost blew my clients deal and in turn almost lost them much of what you listed above.  I had to spend a great deal of time saving the deal for my client.  Yes, that is my job which is why I recommend loan officers who do a great job up front.  I want all my clients treated as if they're worth a million bucks (or you could say a billion these days). 

Nevin - Great, comprehensive list.  I think most of us have dealt with the "too busy to care" loan officer at one time or another.  I'm happy to have found a trusted group of lenders to work with, although sometimes clients find their own source of financing and it's a coin toss. 

With so many "loan agents" who left the market....there was a general hope that the best were the one's that had staying power.  Unfortunately, there are still those that don't realize their success and everyone's else's for that matter is based upon their ability to do what they took on the responsibility property. 

 Thanks for the post.  I am greatful I have folks I can trust.  I have recently had some less than great experiences with inheriting a loan officer.  How I longed for whom my buyers usually choose.  I had to deal with all of the complaining, play mediator...you get the picture. 

I realized how important having the right lender is after this happened to me in the past. It is great to have someone you can count on!

Hi Nevin - A very nice post for purchasers to understand the importance of selecting a suitable loan officer.

Nevin, at the mortgage company I used to work for, PURCHASES ALWAYS COME FIRST was the rule of the day - PERIOD.  As the head underwriter, if a purchase loan came in, it went to the head of the stack.  If conditons came in on a purchase transaction, it went to the head of the stack.  Period, End of story.  All lenders should adhere to this. It makes for the best customer service and best "outward appearances" to all parties. 

Unfortunately I think every one of us has run into something similar to this. Great outline as well.

Nevin - I don't know what the market is like where you're at but here in Los Angeles & Ventura counties, it's pretty tough, especially in the lower end of the market (400k<) where most of my buyers are. 

So many of the properties are run-down, dilapidated, dumps and when working with my buyers and their Realtors, I can't seem to stress enough that these types of properties are major concerns.  Sometimes, nobody's listening.  This has been the bain of my existence for awhile now and pretty much the reason for almost all of my fall-out and cancellations.  However, with a 94% close rate, I'm still able to close most of my transactions.

Agreed! There are so many ramifications when a loss mitigator drops the ball on a file. There really should be some level of accountability.

Excellent title.  Good post.  Thank you very much Nevin -- I wish more lenders felt as you do. --JM

Who you choose for a lender is so vital.  I had some buyers who wanted to use an inexperienced relative and I'm thinking this is not going to help you.  Short sales have definite deadlines and they have to perform on time or it will cost you.

I knew there was some reason why you're a good loan guy!!  You actually said: ". . . an earnest money deposit as consideration to make a contract valid"

All the other things you said were great too, but this one thing -- since so many people don't realize that the exchange of legal tender makes the contract valid is so nice to read!

that's right, there's a lot of people that will be effected by this.  thank for your post!!

Nevin,

I love your post!  I think it can only serve those that are searching for a lender right now.  Who you choose to work with on the lending side could make all the difference in the world when it is time to close.

Wendy

Nevin - This is a HOT button for me.... Last year, I sent a client over to a loan officer - who said she wanted my business. At the end of the day, she told me, Nope sorry, cant help him. He needs at least 6 months or so to get his credit scores back up. Thanks for the referral. Thank you very much.

She didn't guide him as to how to make improvements. We both felt she left him out in the cold to figure it out for himself.

He was the last client I ever send any business to. Yikes!

I am with Loreena.  A loan officer that doesn't do whatever it takes to help a client is worthless.  Thank you and next does not work.  I treasure those loan officers who take a genuine interest in their clients and go the extra mile.

I am a believer in Karma and if they really don't care and we know for many that is true, eventually it will come back to bite them. Let's see, lost respect from a Realtor, multiplied many times will soon put business into the caring hands of other loan officers. This indeed happened to a WF loan officer locally a few years back.

Nevin you are the king of attention grabbing headlines !!!!!!! Another great post too !!!

I have a loan broker that I am loyal to in referring clients, he in turn takes care of us. Kind of like we wish the clients were with us,loyal.

Nevin: I only have one thing to say to that line of reasoning by an LO. That's bunk! Anyone who is too busy to care needs to get out of this business! Thanks for the post!

Nevin, there is so much to be lost over the course of a transaction. A lot of it can be prevented with clear communication and mutual respect. Great blog.

Excellent I "heart" good lenders!

Toula - Thanks!

Debe - Hi there!  Since we work together all of the time you know I'm always double checking everything before I hand you a pre approval letter.  How many of our purchases have failed due to lender denying the loan?  0  

Vickie - I think a lot of experienced brokers will take the time.  I think the loan officers at large banks are required to push a lot of volume rather than taking precautionary steps.  They are employees and have to do what they are told.  I have been offered jobs by Wells Fargo and other large mega banks but I won't take the position for this very reason- my credibility.

Melissa - I can only imagine!  I am licensed in NC if you ever need my assistance.  Not saying I have to get the looan but I can speak to your buyer and let you know if you are likely to have issues.

Virginia - You are correct that it is not forgive able.  However there are instances where an underwriter will create their own rules contrary to guidelines and will deny a perfectly good loan.  A broker can then go to another lender and get it closed.  If it is a bank then the buyer has to start all over again with a new loan officer at a new company.

Linda - I am also licensed as a real estatae agent for CA (required by the state) and have owned a real estate investment firm.  After buying homes on a regular basis I was able to experience a small taste of the stresses an agent deals with.

Jimmy - Welcome!  ABC to me is about sales.  I like to treat my business like an attorney prepares for a case.  Pull out the books, review, investigate and then I build my file for submission to a lender like an attorney prepares for court. Thanks for stopping by!

Carla - I hear ya!  Fonville Morrisey is a nice company.  You are only a few miles away from our Raleigh office.  Let me know if we can ever be of assistance!

Jason - A coin toss it is!

Jamie - I guess it is bound to happen since the buyer can choose to use whomever they want.

Kristi - I think it's important to surround yourself with professionals in every aspect of your business.  All it takes is one person to kill the entire deal, especially the loan officer.

Marc - Thank you.  I bet its cold out there isn't it?  Brrrrr!

Juli - I think most companies have underwriters for refinances only and others for purchases only when volume picks up.  It's the loan officer pre approving a file without doing their due diligence either because they don't know any better or have to push volume and then they "hope" it gets approved.  All of the loan turn downs could have been avoided if the loan officer had taken the time to truly pre approve the buyer. Thanks for stopping by my blog!

Brandon - Thanks

Donne - If it helps you at all (we have to stick together you know!) I always copy and paste the guidelines regarding property condition and e mail it to the agent and buyer if I catch wind that they are looking for "fixers".  If the condition is questionable I call my reps at several banks and run it by them before telling the client and agent to proceed with an offer.  It takes a lot of time out of my day to do this and I often work 14+ hours but that is the price we pay for keeping our reputation solid.  I know that you are an excellent  and professional loan officer by reading your posts and because of the respect you get from agents on Active Rain.  I think as we share things with each other we both become more empowered.  Thanks Donne!

Vickie - Agreed. it is hard to hold a large bank accountable since they have so many files they don't really care.  A small broker or small mortgage company relies on referrals to stay in business so if I were a practicing Realtor I would seek out loan officers in small businesses over mega banks any day.

JM - Thank you!

Tni - Oh my gosh!  An inexperienced relative financing a short sale?  Not saying they won't get it done but I can only imagine how stressful this is making you.  : (

Carla - Thanks!  Don;t forget that all of us brokers in the state of CA licensed by the DRE must carry a Real estate license before we can get our loan officer license so all of this has been pounded into our head from day one!  Thanks for stopping by to say hi!

Brandon and Grace - Thanks for stopping by my blog : )

Wendy - Thank you!  This post was intended to "sell" my services to agents and buyers who read this post.  If I don't tell people what I do they'll never know.

Loreena - I can see where that would upset you because the loan officer didn't take the time to help. Although they are not required to, I would have made the time. People feel bad enough when they are denied but to be kicked to the curb without direction or information on how to better their situation makes them feel abandoned. However you were spared the nightmare of the loan offer telling you "Everything is fine.  They're qualified!" and then 1 week prior to closing the loan is denied for something the loan officer should have known was never going to get approved.  It could have been worse!  Thanks for stopping by!

Chris - Some lenders are proactive and communicate loan status regularly to all parties so that the agent can focus on getting more business.  This is how I do it any way.  If a loan officer can't take a minute to update everyone then they aren't providing "service".

Corinne - Agreed.  At least give them something they can use to better their credit! If not for the client then do this for your Realtor.  What we do reflects poorly or positively on the Realtor that referred us. WF.....no need to say more.

Michael - Thanks!

Rob - Glad you have a good LO.  Hang on to them/him/her tightly!  The second part of your statement is an entirely new subject you could blog about ; )

Paul - Yep!  Either they need to get out of the business or hide under the umbrella of "Mega Bank" where they make the phone ring and are told what to do and how to run their business.

Aaron - So true.  And the up front work saves everyone in the transaction from getting burned.

Excellent information Nevin. This is exactly why I hate having someone call me on a Fri. night and expect a approval letter for financing after a 5 minute phone conversation so they can go look at houses all weekend. More times than not, they got my number from a Realtor. Really puts you in tuff spot if they are a marginal borrower.

Hi Nevin -- An exceptional loan officer and lending institution are a strong piece of the puzzle to ensure this complicated thing called a real estate transaction get closed with only minimal bumps in the road.  Even with great people and processed involved, it can still be hard sometimes, but having the right people, institutions and processes in place make a huge difference. Totally agree.

Thanks Nevin. When I start working a new relationship with a Realtor I first introduce themt o my team of professionals because they are the ebst on the business. I also prove to them that we are closing purchase transactions in less than 30 days with the best pull through ratio in the industry.

We allw ork too hard for some numbskull to screw up our colelctive reputations and cause so muchf rustration.

Nevin,

Your right on the money and good mortgage professional makes a good real estate professional look even better.

-Brent

I am with Virginia, #13 in comments above. 

I had one fall thru after the lender decided the borrower didn't qualify because he was self employed. On DAY 1 that was disclosed to the lender!

Greg - I get these from new Realtors using my services for the first time.  It's understandable that they want to get moving on the home shopping process so their client doesn't get disinterested and go elsewhere.  I will NOT give a pre approval letter unless I have actually pre approved a buyer.  My reputation is tarnished in the community when my pre approvals end up being bunk. Also the agent wastes their time.  If they really feel strongly about it I will give them a pre qualification letter but this is rare.  

Case in point- buyer has 7 million dollars in liquid investments. 400K loan amount , second home purchase 40% down 800 credit scores. Easy deal right?  Wrong. Loan would have been denied using conventional / government financing.  2008 they had a profit- all from dividends. 2009 they had a 150K loss.  Only income a lender would have used is social security which put their DTI too high.  They have to go to a protfolio or private lender with less attractive loan terms. Self employed borrowers are hard to finance unless they pay taxes on a large portion of their revenue. So what seems like a slam dunk may be a dead deal.

Chris Olsen - Thanks! I agree with your statements as well.

Chris- the loan ranger - agreed

Brent - True!  Same with us, a good processor makes a loan officer look even better or can kill the loan officer if neither one knows what they are doing.

Erica - That sounds to me like inexperience of the loan officer but hard to say.  If the loan officer has been in busines for a long time then in my opinion his processors have been doing everything for him/her.

That;s why is so important to deal with a trusted lender, right Nevin? ;-)

Justin - YES!  My intent for this post was to advertise our expertise and hopefully attract new business.  I woke up this morning to find it featured.  How cool is that?!

Hi Nevin,   Your well written post is a great reminder to all involved in this business that our words & actions do indeed have consequences.  Well done !

Nevin, 

I love this post.  Sometimes I want to scream in frustration at folks that just don't care to do their job.  If you cannot do it, why did you take it in the first place.  (I'm not talking about something changing along the way, I'm talking about not getting the original mortgage application in, or lying about having something you really needed to do a loan in the first place.) Argh!

Kudos to you for being straightforward and completely understanding the business you and I are in:-)

All the best, Michelle

Bill - Thak you

Michelle - thak you!  I scream in frustration at how sloppy some people can be in their business.  I mean come on...really?  I guess reading is to much to ask of them!

Nevin:  I found this on Charita's re-blog and just popped by to say"Well Done!"  Congratulations on the Feature and also on thinking through all of those things that can be lost when the deal goes south. 

Nevin,  Glad I caught this post!  Excellent advice!  I worked for an online lender at one point and they asked me to head up the purchase division....great leadership opportunity, I thought! NOT!  With very sloppy processing, massive volume and management that was looking for volume, not quality and referral, I had several files miss the COE in one month (for the first time in my 20+ years!).  As I pitched a typical red headed fit, my manager looked me in the eye and said, "Stuff happens"...My response:  "Not on my watch".  I left the company shortly there after.  They closed less than six months later and not a soul lamented their death (including all the employees). Evil place!

I am glad this got featured because this is so true.  I'm sorry doesn't cut it sometimes!  There is so much riding on a transaction and so much time, energy and $$ lost when someone doesn't turn down business because they can't do it or get to it!

Valerie - Thank you for stopping by to say hello!  I really appreciate it!

Deborah - Your story is proof that what I said is true and I appreciate you sharing your story.

Renee - So true.  I hope consumers read and heed.  So many are focused on the lowest rate , that they go after whoever will give it to them.  Little do they know that they could lose the purchase and contractually be oout thousands of dollars for chasing a rate that most of the time ends up being the same or higher than what they would have received at a full service broker.  Bottom line- financing a home is a major event, yet people will take better care of their cars by spending money at a dealership but then try to cut corners on a home purchase.

Excellent points Nevin.  You and I must have been sharing the same brain.   

David - Hi there!  I enjoyed your post too.  Thanks for stopping by to say hi!

Great post, Kevin! Everyone loses if you don't chose the best team possible going in!

Nevin - Although I see you over and over commenting on others post I don't think I have ever read anything that you have written. I am glad Donne put you in her Called Shots post and glad this got featured.

It is so important what you say in the beginning that there are so many lenders, so called, that just don't take the time. Too busy? They just don't care. I am sure you and Donne and Deborah have much more compassion for their clients and G I V E them the time of day. They are not just a number on thier desk.

One thing that I did not see in your post, unless I missed it, is the Underwriter kill. Many underwriters these days kill a deal because at the final review all of a sudden there is another condition that was not a part of the original acceptance.

Or, the client went out and put mucho purchases on thier credit card BEFORE Underwriter approval.

Very nice list Nevin. See you around.

Sylvie - Thanks

Ken - I didn't include the underwriter kill because it is out of our control.  We can follow guidelines exactly but if an u/w wants to go rogue on us then we are completely powerless and it isn't a reflection of poor service.  This post is about lazy loan officers that don't know how to effectively do their job or those who work for big banks who push volume instead of quality.