I'm just really bummed and hopeful someone can explain the mortgage application process to me because I feel like the broker processing my application doesn't care and I have been waiting for weeks now to find out if I am approved.  The weird thing is that, when I first talked to him, he told me I was pre-qualified (after seeing my credit report) and that we just needed to process everything and get the letter so there would be no "conditions" in my letter.

I have since lost out on two houses that are in the neighborhood where I want to be, at the price I can afford.  There is less and less now that I can afford.  How long will this take and was he truthful when he said I was "pre-qualified," or did he just say that because he gets some commission on running my information?  He also told me things take "around 36 hours" to process... again it's been weeks.

If I am dissatisifed, do I have any recourse?  I feel like the damage is done, he pulled my credit already and created an inquiry on my ssn.  If I stop the process, won't I just have to go through it all over with someone else?

Allyson Wilson

Yes it is better to deal with a person who responds to you within reasonable time and  tells you the truth.

Hence it is better to go through it all over again.

Jacob Varghese

NMLS 327086

swanloans.com

Allyson

Unfortunatly you have applied for a loan with a loan officer that appears to not be a good communicator.  The #1 thing that a loan officer should do is communicate constantly, good or bad or no news.  While we do this every day and everything is “normal” to us, buying a home is the biggest purchase you will ever make, and it deserves to be treated as such.

Here is what is likely going on:

1.       Your loan has been turned down or the LO overlooked something and your loan does not meet his company’s guidelines.  He is thus too embarrassed to pick up the phone and tell you.  This DOES NOT mean that you should give up.  Many companies have “overlays” to standard loan guidelines.  This means that despite what FHA, Fannie or Freddie guidelines say are acceptable, the company you applied with may have their own rule on top of them.  so you should shop around

2.       The LO is overworked and just does not have the time to commit to your loan.  In this case you don’t want to work with this LO and should shop around

3.       The LO is just a poor communicator.  In this case you don’t want to work with this LO and should shop around.

4.       The LO has forgotten about your loan because they are disorganized.  In this case you don’t want to work with this LO and should shop around

5.       The LO has other loans that he is prioritizing over yours, for whatever reason (importance of referral source, commission to be earned, volume of the loan, potential for referrals etc).  In this case you don’t want to work with this LO and should shop around

6.       The LO is no longer in the business.  In this case you don’t want to work with this LO and should shop around

7.       The LO is new and does not really know how to process a loan from start to finish.  In this case you don’t want to work with this LO and should shop around

I could be wrong, but the bottom line is it does not sound like you should work with this LO.  As far as recourse, you really don’t have much.  But keep in mind, an additional pull on your credit is small factor when trying to buy the right home. 

Hope this helps

Dan

Hi Allyson,

I agree with both Dan and Jacob, however there seems to be a 'gap' in what has happened since you applied. When you say he needed to see everthing what did you send him? The credit report and a quick automated underwrite via Fannie Mae or Freddie Mac's automated engines is basically your credit report run with what you have verbally told this LO and what most of us base our 'Pre-Qualifications or Pre-Approvals' on. If you did in fact send him your pay stubs, W-2's, bank statements and he or his UW has reviewed all of this you should at least have a loan approval pending a signed sales contract and appraisal on the property you have chosen, you however still need to have a final underwrite based on the actual property and loan size. What also sounds strange is your comment that you 'lost two houses'. Usually your realtor will put in an offer and include your pre-approval letter and you then continue on with the full underwrite. So, how you lost them I'm not sure? I assume you never even got a pre-qualification or pre-approval letter?

The 'normal' course is the pre-approval with a credit report, and your supporting income and asset documentation sent as soon as possible when applying, Then the LO can confidently send out a pre-qualification letter or pre-approval letter, however you usually do not go into underwriting unless you have a property under contract and the underwriter then has solid numbers (loan size, property taxes) to base their approval on and then the appraisal as well, this way your debt ratios are correct. Most LO's if a property is not chosen yet will overestimate the taxes and or loan size to insure you qualify (the good ones do, no one likes surprises...). Depending on the lender and if all goes smoothly, qualifying to closing can happen in as little as 2 weeks or up to and past 30 days, it all depends on the lender and the LO and the borrower's response time to items requested.

As for having another banker/broker pull your credit it should not really be an issue as long as it is within 30 days of the first credit pull. The Fico scoring models allow for multiple credit pulls as long as it's the same type of credit pull, if done within a certain time span. You could have 4 mortgage bankers pull your credit in a 2-3 week period and we would all get the same scores (or 3 car dealers, etc...). It's when you combine that with a new cell phone or Visa card, car loan, etc.. that then lowers your numbers or it is pulled outside of the allowable time frame. If your scores are relatively high (above 740) and you have a great payment history one more pull should not affect your scores that much even if outside the time frame and if going with FHA you have some room anyway.

So, yes, start over with a more responsive and reliable loan officer,

Good luck to you!

Dan

Thank you all!  This is very helpful.  I did send everything-- w2's, pay stubs, tax transcripts, and even "letter of explanation" as to why I had 4 w2's in 2009 (sporadic employment.)  I also sent him a link to 2-3 houses I was interested in.  I wanted to be pre-approved before I even made an offer because I have heard things can fall through if you put the cart before the house.  I am gainfully and well employed now at a big trade association on Capitol Hill. I really see no reason why it would take so long and I am really starting to get miffed.

He did tell me "everything looks great." "I just don't want to give you a letter with conditions, so lets get everything we'll need up front." "Once I have everything it normally takes 36 hours."

I have done some follow up research and see that many people have waited 2-3 weeks so I am almost ok with that, my thing is, I feel like he misled me, and I don't like it when people don't shoot straight with me.

Can I just call him and tell him to stop the process?

Yes, you can call and 'stop' him, or just start somewhere else and let him keep spinning his wheels, then you will have the option of seeing which lender has lower fees and better rates once you are ready to lock in your rate once you have a home under contract. Nothing wrong with two loan approvals, there is no cost associated with them, it's the appraisal being ordered that is usually your first 'fee'.

It really should not take 2-3 weeks, you need to ask him if his bank/lender is actually sending your documentation to and through underwriting?. If so, then maybe his company just takes that long and since you don't actually have a home under contract yet they are not giving your deal any priority. Either way, he has misled you on this time frame. "Normally 36 hours" certainly should not be 2-3 weeks.............but maybe that's what it is for him and his company? If he had told you from day one "this process may take up to 3 weeks for a full loan approval with no home under contract" then you wouldn't be searching the internet for answers, you would have been willing to wait. So, either way you have the right to be a tad upset. I realize lending has really 'tightened' up, but with proper documentation and the correct procedure it should not take 3 weeks. Pre-Approvals with what you sent take 45 mins.(it's all automated and if the LO verifies your docs), getting it all to an UW should be less than a week, 10 days tops, most lender's 'turn times' are under 3 days for an initial underwrite for purchases and maybe longer for refi's (it's just not that busy out there!). So, something is not right.........

its a wells fargo broker.

Yes, he said I was preapproved-- over the phone.  (I looked him up and he is legit with decent reviews too).

But he also said, now that we know you pre-approve, lets go ahead and get all the paperwork done so you can have a letter that is free and clear of any conditions and, with that letter, any seller will know that you are good to go.

I just wish he hadn't told me 36 hours... I have seen (after the fact) that other people online have said that wells fargo took weeks to complete everything... but its the fact that he lied to me that is eating me up.  Why would he tell me 36 hours... its "used car salesman" behavior. And now I feel like he tinks I'm a dummy who he can just tell anything to.

Plus, I feel like I calculated this incorrectly.  Should I have made an offer on a house first?  That seems like its dumb.  Why would anyone make an offer on a house without knowing the bank will finance it.  It seemed like the smart thing to do to pre-approve and then go make an offer, but now I have lost two houses I would have made offers on.

Thanks for listening. I will call him now.