The lending industry is falling apart. What can you do as a buyer's agent to make sure it doesn't hurt you or your buyer? You can demand three things.
1. Demand Accountability
Your work, your reputation and your marketing dollars brought you a buyer. You refer that buyer to your lender for prequalification. You should expect the loan officer to tell you the truth about the buyer's ability to perform.
True story: A Tucson REALTOR called me yesterday to see if I could help his buyer. The buyer qualified (according to the Big Bank lender) for a VA purchase on an REO. The REALTOR submitted the offer three months ago, and the seller signed a contract six weeks ago. On Tuesday of this week, the Loan Officer told the REALTOR to schedule closing for Friday, December 19th.
Yesterday (Wednesday,) the lender's processor called the borrower and said "Sorry, your loan was declined. You had a mortgage late in 2007." The processor! Not the loan officer.
The Buyer's Agent referred his client to the Loan Officer three months ago. Do you think someone might have noticed the mortgage late when they pulled credit back then?
Neither the Buyer's Agent nor the Listing Agent will have a payday on this contract.
2. Demand Stability. Many great people have left the lending business unexpectedly.
A quick Active Rain search indicated that more than half of the loan officers who blogged in 2007 haven't commented or written a post in the last six months. Google their company name, and you'll find that many are out of business.
There are 160,000 fewer LO's still originating loans. Since late '06, 374 major US lending operations have gone belly-up, according to the Implode-O-Meter. (Google that. It's an eye-opener!)
NMLS License Requirements: The National Mortgage Licensing System under the SAFE Act is being implemented at a time when States are cutting back on employees who actually do the licensing.
Arizona, for instance, has only two employees to handle every single loan officer license application between now and July 1, 2010. Once an applicant has completed the required education hours and passed the National and State tests, the State has 120 days to issue the license!
If your preferred loan officer hasn't started the process yet, he or she may not be able to originate loans come July 1st. There's likely to be a huge backlog of loan officers who won't meet the deadline.
(FDIC Institutions and their subsidiaries are exempt from the licensing requirement. But the big banks have cut back on staffing. Ask yourself how long Wells Fargo, Bank of America and Chase are taking to issue a Clear to Close on your buyers' purchase loans.)
3. Demand Availability (so that communication happens early, easily and often)
Buyers Agents who refer me business have my cellphone, my home phone, my Blackberry email, and my schedule. That's right. My schedule. They know when I'm going on vacation, where I'm going, and who's watching the store while I'm gone.
In addition, I've purchased software that automatically updates EVERYONE in the transaction simultaneously at every critical stage in the loan process. We closed a loan today, and using my software program, I sent out an email to everyone involved when the loan docs went to title.
Here's the history on this loan. The buyers were pre-approved on the 17th of November so they could go house-hunting with their REALTOR. We had a signed contract on 11/30/2009.
This purchase will fund and record tomorrow.
When it does, I'll send out another email, thanking each participant in the process for their exceptional work in making this purchase happen smoothly and quickly.
That email will go to
- the buyers,
- the listing agent and their assistant,
- the buyer's agent and their assistant,
- the escrow officer and their admin,
- the insurance agent,
- my loan processor,
- and to me. (I like to make sure the message actually was sent.)
Be demanding. Your buyers and your livelihood require it.
EDIT: 4. Demand Attention for your small purchase clients from the same preferred lenders who get your big purchase clients!
Deanne Olivas (comment 19) mentioned having a client who is buying a condo for a small amount of money (still an important client to me) so she had to go to one of those highly visible online lenders because the loan amount was too small for the any local loan officers.
That should NEVER happen! (Or is should never happen more than once before you switch lenders.)
I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.