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Good Mortgage Lenders And Not-So-Good Mortgage Lenders

This article is more than 9 years old.

I recently had a conversation with a friend and colleague, Jeff Fass over at Bank of America .  Jeff manages an office full of loan officers in Paramus, NJ and by job description; he is the guy that sorts out loan approval process issues for his people when they arise.  He told me about a conversation he had with a real estate agent during an issue sorting out event, and she pointedly asked him if there were any “good” lenders left.  She said frankly; “who’s good anymore?”

Jeff has been in the mortgage business a very long time and has seen it all, he has a good grasp of the current state of the mortgage industry and he offered an intellectual answer laced with his considerable experience.

He said “nobody.”

To be fair, that was only the beginning  of his response which went on to explain the brave new world of QM (Qualified Mortgage) and ATR (Ability-To-Repay) and how all lenders play by the same set of make sense, buyback avoidance underwriting approval  and documentation guidelines.  When he said “nobody,” he meant no lender gets to bend or warp the rules to gain an unfair advantage over the rest of the lender universe, “nobody” is special, every lender offers up the same mortgage approval gauntlet.

He went on to explain that there is an answer beyond “nobody,” that individuals make a difference in how the mortgage approval process is navigated, individual loan originators (loan officers, advisors, etc.), with experience and savvy can help borrowers anticipate and address issues early and often in the mortgage approval process. Document requirements and underwriting guidelines are not a mystery; every loan originator with an NMLS # has the ability to review borrower profiles and accurately identify what documents will be needed to completely paper a file.

Too often loan originators do not take the time to vet approval guidelines against the structure of a mortgage deal or gather documents needed and manage borrower expectations for supplying even more documents.  Very often, a paystub or a tax return or a bank statement will trigger an additional document request, and preliminary review can address issues up front.  Failing to take the time and make the effort at the front end causes those dreaded 11th hour fire drills at the back end.   Mayhem on the eve of the closing date when the moving van is full of furniture and the utility companies are coming to flip the on switch and the lender is still scrambling to clear a file, is not industry standard operating procedure.

Jeff is right, loan processors and underwriters give the same lifespan to every loan, the same milestones, the same must haves, the same challenges and the same goal, a closing.  Loan originators who captain the approval process from beginning to end, regularly avoid the land mines that result in last minute closing histrionics, and they are the answer to the question posed by that and every realtor.

There is of course a continuum of good and not-so-good lenders and every lender falls somewhere on that line, but there is a defense and it is the quality of the mortgage individual originating your loan.  Choose the lender rep and not just the lender and chances are your whole mortgage episode will be good, process, rate, on-time closing, everything.  Choose a lender based on rate or household name and be ready for whatever comes next.