AT LAST, A GROUP I CAN UNDERSTAND! A PLACE TO LEARN. . . OR RANT. . . ABOUT UNDERWRITERS.
Charles Dailey has introduced a new group, UNDERWRITING, that should be of interest to all real estate agents and brokers who have ever had a home buyer's loan application rejected by an underwriter, which probably includes every agent and broker who has had more than 5 settlements.
WHO WILL WANT TO JOIN THIS GROUP?? Any ActiveRain member who:
Has ever worked with a home buyer who has:
1. Searched for homes for weeks/months/years and finally. . . . finally, find the perfect house,
2. Managed to get a ratified Contract of Sale after a week of serious gut-wrenching negotiation,
3. Made loan application with a loan officer who speaks to the prospective borrower in Uniform Residential Loan Application (Form1003) 'ese.
4. Produced documents to a loan processor who works at a custom built desk the right side of which is a shute that leads to a BLACK HOLE and who was trained at birth to advise borrowers, "If I don't get a copy of your third grade school transcript by 3:00 p.m., your loan application will probably be rejected."
5. Manage to hurdle through steps 1 through 4 only to hear from the loan officer 2 days before the scheduled settlement date in the Contract of Sale with a "Time Is Of The Essence" clause, that. . .
"the file is in UNDERWRITING".
6. Then, about 24 hours prior to the scheduled closing, as you drive to the airport to pick up your home buyer who traveled 3,000 miles to attend the closing, you receive a phone call from the loan officer that the Underwriter wants:
* Another appraisal.
* Another comp with a kitchen in the upper level, such is found in the subject "Bi-Level" floor plan of which only 3 exist in a 10 mile radius and none have sold for 5 years. The Underwriter doesn't want to use the Appraiser's Split Foyer, Split Level, Colonial or Rambler models with similar square feet and amenities. 
* All of the contractor receipts for upgrades to the property in the past 3 years to justify the remodeled price accepted by the home buyer, the county permit office and the appraiser.
*Another appraisal.
While the experience of many real estate agents and brokers will differ from the above actual Underwriter rejects, if you've been around this business very long, you've experienced similar experiences, or heard of them from other agents and brokers.
ADVICE TO AGENTS: BEWARE THE TICKLER FILE: Try to find out from the loan officer if their mortgage company policy is to permit loan officers and processors to operate with a "tickler file" system. This file management system is dangerous to the health of your buyer and their agent. It will insure that the processor will wait until the very last minute to demand additional documentation after the buyer has already produced every document in their possession. Don't do business with loan officers who sell themselves to prospective borrowers and "turn the file over to their processor". The loan officer sold the loan, they should know what's going on with it.
One of my favorite "tickler file" last minute requests is the processor who contacts the buyer with a demand for a letter from their landlord detailing the dates of their rent payments for the past 2 years and if they don't get it to the processor before 3:00 p.m. (the day before settlement), their loan will be rejected. Yes, that actually happened.
Many years ago, I was advised by a wise managing broker, when I inquired about the duties of the Underwriter, that:
- An agent's job is to sell a house.
- A loan officer's job is to prepare the loan application file for Underwriting.
- An Underwriter's job is to blow holes in it.
IT JUST GOES WITH THE TERRITORY.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
County Virginia. Ask about the Homefinders.com New Home Buyers REBATE.
