I’ve been having an almost comical experience with the underwriter who prompted my last posthere on Lenderama. So I thought I would keep you up to date.
But first I have to just say this. UNDERWRITERS STINK!!!
Okay. Now that moment of immaturity has passed and I can get down to business. Listen, I understand the underwriter’s need to be thorough especially in these days of crisis. But really, my problem comes in when each new day brings a new stip to satisfy. Now they have come up with a technical problem in the PUD. Why can’t I get these all at once?
Really, every day I satisfy the previous day’s request and foolishly think closing should be the next day. But alas, a phone call the next morning will have a sheepish lender on the other end of the line saying “Sorry, Chris. They have one more thing.”
Do you ever watch those detective shows like CSI:Miami. They crack me up to the point that I cannot even watch them. A clue will come in and out the investigator will go. Why don’t they wait till they get a few more facts in before they run all over town accusing people of wrong-doings?
Likewise, why can’t underwriters gather all their stips and share them with me rather than doling them out piece by ever loving piece? It has to be embarrassing to lenders when they keep having to call their primaries day after day with “one more thing.”
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{ 16 comments… read them below or add one }
OMG- Chris, you already know that I agree with you, but for those reading that have the ability to CHANGE this problem, please please for the love of God, I’m begging you- quit piecemealing this crap together.
I understand the belts tightening, but this is really out of hand. Chris, thanks for writing about it!
Lani,
Thank you for commenting. Looks like it’s not too popular of a subject here on the mortgage blog.
Anyway, I really am not that rude of a person. I just think 29 days prior to closing is time enough to get things done. It’s in EVERYBODY’S best interests but it would eliminate some writing material for me.
Chris–unpopular as it may be, I disagree with the tenor of this post.
Rarely are my packages stipped. Why?
1.) I turn down files and act as a front line underwriter.
2.) I invested the 8 hours it takes to read the FNMA and FCLMC underwriting manuals, highlighting and taking copious notes.
3.) Everything is branded, LOX on the front page.
4.) I don’t take any marginal deals.
5.) I get the borrower to get the PUD/CONDO stuff.
Is what it is, but the goal on EVERY submission should be a one pass clear to close. Marginal files should be refered for a fee in your office.
Nobody wants to talk about this because the answer means somebody is about to be thrown under the bus. Most likely, your LO.
It’s almost never the underwriter’s fault. They HATE working on conditions. The most happy moment for an underwriter on any deal is when they get to approve the file and move on.
When an underwriter asks for more conditions, it’s because the conditions that were submitted didn’t meet the criteria of what the underwriter was requiring.
It’s entirely possible that you’re mad at an underwriter for bending over backwards to give the LO a chance to make the deal work.
The situation could be different in your case, but many LO’s these days don’t underwrite the application and conditions before sending them to a lender. They don’t know how to read title work, or an appraisel, they don’t understand the premise of a paper trail for closing funds. They don’t understand WHY the underwriting is asking for what they are asking for.
When an LO tells you they want more conditions. Ask them why? If they say, “because she’s a psycho”. Then maybe the LO is the one you should be mad at.
Ah, some reactions. And thank you.
Isn’t it funny the two people on the house side didn’t even think from your perspective. Why? Because we NEVER get to talk to underwriters.
I’ve asked over my 6 years probably a couple dozen times to talk directly to an underwriter and have never been able to. Usually I cannot even find out who they are.
So my information comes from the L.O. Naturally, as it would appear, there is the LO’s slant on the subject.
Between the two of your comments I have gained new knowlege.
On this deal, we had the PUD, the properties are easy appraisals (even though additional comps were requested) and the borrower golden. So what you are telling me, is that the items I’ve been having to get are likely because of a lack of understanding from the LO my buyers chose? (I’ve never worked with this person before.)
If I’m reading you both correctly I appreciate your help. If not, clear me up.
I am doing a loan with CITI right now and they have us send in the 1003, 1008 and credit report then they condition for everything they want to approve the file. It takes the “guess” work out of the game. I kind of like this versus some of my other experiences right now. I have read the manuals, the guidelines and like many of you I am a professional loan officer but I must say the conditions have been getting out of hand these past few weeks. I was just successful closing a loan and the only reason is I had read the manuals and I had the explain to the underwriter how to approve the file. She still sent it up to corporate and they agreed with my ideas.
The wholesalers are moving the goal line on us everyday and we just get to go along for the ride.
We can’t say lending is boring!
Keep up the great work all of us!
Cheers,
Bryant
On every file, I put in Impact font, 32 letters: if this file will never close, please turn it down, and don’t condition it to oblivion.
I also note in the same font: $36k in reserves (I only want borrowers with 6 months PITI + 5k if they are 32 or older). 743 credit score (my average is 691) : 36% Debt to income (I have taken to personally referring 45% + to other dudes in the office)
Comp 1: 3 months old….
etc.
That level of care makes a difference. A “golden” borrower? What LTV? Were they putting 30% down?
Hey Chris,
Another quick thought is make sure the buyers are fully credit approved. Make certain they have signed all disclosures and applications. Make sure they have provided all required documents to the lender for approval of their loan. Then it is just a matter of approving the collateral. This would save you a head ache or 2. Do not settle for a quick look at their credit report and a verbal interview. If they have not complied with everything the lender needs for full credit approval send them away till they do.
Hang in there.
Bryant
Thanks for the responses.
Bryant - so your experience says they goal line is moving AND different end users have different procedures. Hmmmmm.
chrisj - Higher standards. I like them. When I work with investors I too have much higher standards than would seem reasonable. While I do not require 6 months reserve I do require 3 and caution 6. All credit scores need to be over 720 (I can hear Gina now….
) and no worse than 90% LTV.
Yes, you can require less LTV, but for return purposes, whenever possible, I like only 10% down.
That being said this “golden” borrower is going for 80% LTV with 6 months reserve, plus. Credit scores are outstanding. Comps are plentiful and real. Vacancy is 0%.
Now, a year ago this would have passed through without even a glance. And while I do NOT have a problem with full file review what I’m really saying to everyone here is…
“Just tell me what you need all at once so I can get it for you.”
What happens to many of us is that we’ll get a stip, wait 48 hours and find that there is another one. We’ll clear it, wait 48 hours and get another one.
So while Todd and Chris say that it might be the LO’s fault they could very well be right. But can’t somebody, anybody, just tell me all the file will need in one message so I could get the demands satisfied?
It’s hard to say what and why without being there. The LO is in a tough spot because they can’t let you talk to the underwriter. They also shouldn’t be talking to you about the details of the borrower’s ability to qualify.
Just as a general rule though, when more conditions are ordered, it’s because the documentation submitted for the existing conditions did not pass muster.
Todd,
Thanks. All of these requirements have nothing really to do with the borrower. Well, one of them was a fully signed tax return. And the borrowers have granted permission to the LO to discuss the details with me. So I know they are good.
One of my frustrations was when a contract underwriter for the loan kicked it all back saying I needed signatures on such and such lines. Not true. After I argued this and won (all through third parties of course) is when all these new things have come up.
Could ego be involved? I would hope not.
I’m sure this will all be over tomorrow when I get this last little thing. But I’ve said that before.
But the requirements coming in item by item is what frustrates everyone. Again, that was the jist of my post. I realize I cannot change the entire industry. Just hoping for change here or at least a reasonable explanation as to why we can’t get this all at once.
I seriously doubt it’s an ego thing. Underwriters just want to be done with a file. They are graded on how many files they underwrite. Reconditioning just makes more work for them.
In addition, working on the same file three, four, or five times creates a great deal of extra work beyond the file itself since each file gets logged into a computer every time it moves around the office. Then it has to be refiled somewhere else when it’s done. Then they have to go find it when more conditions come in. A year or two ago, there was a horde of temps to shuffle these files around. Today, the underwriters are likely on their own. Trust me, they want to be done with the file.
Right you are, Chris.
There seems to be an overly-cautious attitude on the part of underwriters right now. Having just experienced a nearly 60 day process, 1 month and 2 weeks of that being in underwriting, I can honestly say- underwriters are having a very hard time balancing their old realities with their new ones. Everything is tripple checked in triplicate and then issuing final conditions. Satisfy those condition and the MI has an entirely new set of conditions and then the two of those guys agreeing is laughable. I know for a fact that Chris is exactly right because I just went through it, and so did the buyer, and so did the builder and so did my family- beyond stressful. It is personal after about the second set of final final conditions and oh by the way, send me this other condition too. Only not to hear from them for two days to learn there are 3 more conditions. I’m sorry, maybe some of your readers havent experienced this yet, but I assure you I worked with one of the countries most brilliant mortgage brokers, and he picked the brains of some of his peers and all of them agreed that the guidelines seem to now be floating and moving like a moving target. Good luck place kicker! Before you say “buyer” please understand the buyer was A plus plus in every way shape or form- loan processing took 9 days and that was because the mortgage broker was cautious. My feeling is this is going to get worse, before it gets better.
The loan I’m talking about should have been a slam dunk, everyone thought so, and even those we tossed the file agreed. The bottom line is if you’re blaming the LO, you just have not been through what is going on in a lot of backrooms right now.
Todd - I have to believe you are correct on the ego thing. I was half joking.
Benn - My brother in arms! We know it’s going on but apparently it hasn’t happened to everyone yet.
It is important that people know I’m not looking for an Us-Against-Them showdown. That’s not productive and could very well be harmful.
Chris, I bet we’re using the same lender, what do you want to bet…
I don’t know Benn. The odds are astronomically against it with all those lenders still out there. What, one in five or something?
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