One of the facts of the mortgage business today is that it can sometimes be a hurry-up-and-wait game. When it comes to buying a house, I have seen it more than once lately where the seller’s lender who has to approve the purchase contract (because it is a short sale or a bank owned property) takes months to approve the sale and then request/demand that the deal must close in 21 days or less.
It can sometimes be a game of wait, wait, wait… hurry.
Wait, Wait, Wait... Hurry!
I don’t really spend too much time wondering why this is, I just make the observation that sometimes it is.
Which makes it all the more important for you to ask this one important question of your loan officer up front:
“How long will it take to close my loan once I have everything to you that you require?”
By asking this simple question, then if you somehow end up in this situation where you have had to wait, wait, wait… hurry you will know if your loan officer is up to the task or not.
So if you are planning on buying a home in Arizona and find yourself in this situation – who do you call?
They promise with their checkbook that they can get your loan closed in 10 days or less.
Which in my opinion is absolutely-eye-popping-remarkable for today’s lending environment. They have managed to put all of the pieces together under that are required to do this and if it were up to me, I would put them on the Today Show for being able to pull it off on a consistent basis.
But they haven’t asked me to write on their blog.
Yet.
About the Author: Justin McHood is a mortgage broker with VanDyk Mortgage Corporation. You can find him at Arizona Mortgage Team, on the Zillow’s Mortgages Unzipped Blog, and at most East Valley Friday Nights gatherings. He’s the one in the blue shirt.
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Justin,
You are welcome to write on my blog any day – any time!
Asking you to write on my blog is like grasshopper asking sensei to write on his.
Thanks for the good word, it is very much appreciated.
Steve
Are you sure that a ten day loan can be trusted? One of the things about loans is that they have to be done right, and someone who is trying to close you in ten days might be rushing through the important parts and costing you more money. -Tyler
My favorite thing about bank owned properties is that you tell them that it is a cash deal and we're ready to close next week. Then they respond “Well, it's going to take some time to get the title…and there is a $50 per diem if you don't close by the closing date.” Would it be fair to ask for a per diem for every day they drag their feet on getting the title drawn up? Apparently not, I asked.
That's funny – I brought a cash deal to a bank within 5% of asking price and wanted to close in 14 days. They didn't counter on price but countered on the closing timeline…. get this… wait for it…. 45 days for a cash deal. Amazing.
@SpokaneHomeGuy
Amazing. I am going to add that one to the list of “you can't make this stuff up” stories I have heard about or seen.
Thanks for stopping by!
Great point. I still have clients in the process of finalizing offers in hopes of closing by the tax credit deadline….hopefully their loan officers are as amazing as the ones you mentioned.
Banks absolutely amaze me. They want everybody to work at their speed and that is it!
There is many aspects where we think and try to know some more
Thank you
Ghanshyam
Bath Products–Bath Products
Can the ten day close be trusted? Will it cost you more money?
Valid questions?
Here are three points to consider:
1. Why can I do it faster?
Perhaps because the banker that I work for is better capitalized and has a better track record with the investors that it sells its loans to. So, our investors have developed a satisfactory level of trust with our quality controls.
2. Does the fact that they can complete the loan transaction in 10 days imply that they are “rushing through the important parts”?
First, you need to ask, does a longer loan processing time equate to higher quality control? The answer is no. With every loan that I close I obtain and review supporting documentation, independently verify income, employment and assets, review credit for compliance with FNMA or FHA standards (including the removal of “authorized user” accounts to ensure the validity of the credit history), obtain written statements that no new credit has been obtained that is not on the credit report, obtain an independent appraisal according to HVCC or FHA standards, obtain copies of tax transcripts directly from the IRS and compare to documents provided, and review the purchase contract for nuances and pitfalls. Then it is submitted to a DE underwriter who does that again. The question is how long does it take to do that with a residential loan file? It doesn’t take more than two days to actually perform the review as listed above so the question is how good are my logistics and communication related to gathering the required information to underwrite the file and moving the file from processing to underwriting to closing? I can tell you that it makes it a lot easier and faster when my processor sits across the hall and my underwriter and closer are down the hall.
Here is how we close loans in ten days:
o My bank has a clean record with its investors.
o My bank does not have problems obtaining the funds needed to actually close the loan.
o My team has a sense of urgency from start to finish.
o My team is all located under one roof.
o 2009 technology for communications.
3. Who is the “you” that you are referring to when you ask “will it cost you more money”?
If I overlook something and close a loan that should not have closed, what are the consequences?
o The loan becomes uninsurable by FHA
o The loan becomes unsalable to an investor
o I am not compensated for my work
o My company incurs losses from the unsalable or non-performing loan.
o I lose my job and/or my credibility.
So, I am — and my bank is — the “you” that you are referring to. I bear the risk. Fortunately, I work for a company that is well capitalized and is willing to bear their portion of the risk.
Respectfully,
Steve Lines
Senior Loan Officer and Ex “Big-4” Auditor
Sorry, that was supposed to say “valid questions”, not “valid questions?”
A 10 day close in this market is nothing short of AMAZING!! I have an investor that has 24 hour underwrite times but that is AFTER everything is in which takes almost 10 (if you include weekends) to get in most cases. HVCC appraisals are another thing that is making the market painfully slow here in San Diego. I was on a webinar with one of the big guys at VanDyk Mortgage this morning, he was speaking about how your company looks at clients and the market in general. 100% class organization !!!
@stevelines: Nice comment. Additional reading but worth the time!
Justin, GREAT post. As you guys over there well know, it’s not really magic that we perform in being able to close a loan in 10 days. It’s efficiency and support. I’m amazed at your “post shots” excerpt you included in this post. The ignorance is top notch. I don’t know the two involved in the shots, but I bet if they had a lender, like us, that can deliver those kind of promises, then they may improve their client’s perception of them. You know, you look good by who you align with. But, rather than that, they will settle for mediocrity in their lending relationships and continue to laugh at the people actually moving mountains. Funny world right now.
One more “housecleaning” thing. I am a guy who believes in expectations. Do NOT expect to get a loan closed in 10 days if the borrower dragging their feet. Get your lender what they need, when they need it, and in 10 days you too can have your keys.
Excellent post again and thanks for the inclusion. You guys are kicking some butt and I enjoy working in the same league as you. Not much room at the top!
This comment was originally posted on Arizona Mortgage Team
Justin, (Posted to Facebook)
I appreciate your comments, not every lender operates the same way. I only wanted to make the point that there are many lenders in the mortgage industry who have made false promises (as we are all well aware of), I am certainly not pointing the finger at you.
In my business, I do have the ability to close a loan in 8 days or less, but I do not communicate this because, for me, it is not true for all individuals purchasing a home.
Each individual borrower is different and their mortgage needs vary from one customer to the next. Some clients will fit into a 10 day closing, but others will not. I’m not aware of a lender that can close an FHA 203K loan or an FHA Good Neighbor Next Door 203K loan in 10 days.
The reason I don’t personally guarantee a specific number of days to close, is because my capacity changes monthly, as does the fluctuations of loan production. I especially wonder about this issue come April when the first time home-buyer tax credit expires. There will be a huge increase in loan capacity with many lenders and it will be more of a challenge to meet such quick and high expectations.
Just my 2 cents.
Gary Miljour
This comment was originally posted on Arizona Mortgage Team
Look.. not here to bust chops… but you make this statement several times.
Here is how we close loans in ten days:
o My bank has a clean record with its investors.
o My bank does not have problems obtaining the funds needed to actually close the loan.
o My team has a sense of urgency from start to finish.
o My team is all located under one roof.
I can agree that having everyone under the same roof helps, but the part about having a clean track record with your investors “does not” close your loans any quicker. It helps you fund your loans quicker. If you are telling me that you underwrite and close your own loans, why do you keep bringing up your track record with investors? I have an idea why this is mentioned… it’s called marketing and making yourself look stronger to the average person who doesn’t understand the whole mortgage process. Hence why you are pushing 10 day closings. And this is easily accomplished if you aren’t closing that many loans and if they are all DU approved. These are just my opinions from 17 years in lending. But I will say this, using the phrase “guaranteed 10 day closings”, even if you can do them, is very scary. Just like those that can close loans under 620 credit scores to 580… yes, it’s on their matrix on what kind of loans that they can close, but it doesn’t mean that they can close them.
Overall, I hate to assume, but the loans that you are closing in 10 days are deals that aren’t hard… need credit work… missing some assets… Are you telling me, when I client calls you then, that the guarantee sticks? Or is the guarantee offered after you scrub your client down to their underwear to make sure your guarantee will hold up? Hey, just asking the questions because of how I read this…
I wrote this on the other site that I was linked to in regards to these 10 day closings…. here is what I said..
Look.. not here to bust chops… but you make this statement several times.
Here is how we close loans in ten days:
o My bank has a clean record with its investors.
o My bank does not have problems obtaining the funds needed to actually close the loan.
o My team has a sense of urgency from start to finish.
o My team is all located under one roof.
I can agree that having everyone under the same roof helps, but the part about having a clean track record with your investors “does not” close your loans any quicker. It helps you fund your loans quicker. If you are telling me that you underwrite and close your own loans, why do you keep bringing up your track record with investors? I have an idea why this is mentioned… it’s called marketing and making yourself look stronger to the average person who doesn’t understand the whole mortgage process. Hence why you are pushing 10 day closings. And this is easily accomplished if you aren’t closing that many loans and if they are all DU approved. These are just my opinions from 17 years in lending. But I will say this, using the phrase “guaranteed 10 day closings”, even if you can do them, is very scary. Just like those that can close loans under 620 credit scores to 580… yes, it’s on their matrix on what kind of loans that they can close, but it doesn’t mean that they can close them.
Overall, I hate to assume, but the loans that you are closing in 10 days are deals that aren’t hard… need credit work… missing some assets… Are you telling me, when I client calls you then, that the guarantee sticks? Or is the guarantee offered after you scrub your client down to their underwear to make sure your guarantee will hold up? Hey, just asking the questions because of how I read this…
Overall, yes, this is marketing.. How many people do you turn away, because you know it won’t happen in 10 days? You don’t talk about any of this and don’t say that this can’t be done for ALL… so hey, I know this is about marketing yourself.. in my honest opinion, because you have no disclosers on what can and can’t be done.. this is very misleading. And you use Gary as an example of a doubter. Well, if I had to argue either side, I am with Gary on this one, because all of this is marketing, to get the phones to ring. Yes, can I close a deal in 10 days if I had too, yes. Can I on every loan? No… you need certain things to fall into place and very clean deals… And I will highlight this again.. I can read into this, because of what the other guy stated on his blog, about the details… stating as I did above, that he says…”that I have a clean record with the investors”. Sorry, but that one doesn’t fly if you are underwriting them yourself and closing them with your own funds. This just proves my point even more so that this is great advertising… why? Because you can close loans in 10 days, but it won’t be for everyone, which is something that you leave out. You are abusing and misleading the word “Guarantee”…
Again, just my opinion, but also based on 17 years of lending and because I know what I am talking about. thanks
This comment was originally posted on Arizona Mortgage Team
Dear Jeff the FHA Expert,
If your bank does not have a clean record with it’s investors, there is significantly more investor overlays that require more time to clear in order to close the loan. I’ve worker for and witnessed other lenders that because of their investor relationships have a significantly higher number of stipulations and conditions that need to be cleared to close the loan — not because of the borrower’s scenario, but because of the bank’s investor relationships.
Further, a poor relationship with investors causes more QC checks on loans prior to docs being drawn which also result in delays.
That isn’t marketing, its just the facts … I guess that is what we learn in year 18 in the mortgage business.
This comment was originally posted on Arizona Mortgage Team
So according to Gary the reason he does not provide a guarantee is he cannot always get them done that quick, the reason Justin and Steve do provide the guarantee is because they are sure they can get them done that quick.
Enough said.
BTW.. From what I have seen so far the only reason it is a 10 day close and not a 5 day close is because of disclosure period.
My career has become so much more enjoyable since I have found two lenders (Justin/steve and Shane) who can pretty much always assure me that we can get a deal financed in 2 weeks.
This comment was originally posted on Arizona Mortgage Team
And shane, I need to disagree with your last line… It should be aim for the top, there is more room there
This comment was originally posted on Arizona Mortgage Team
Dean,
I think you misquoted me based on my comment above. My comment was:
“The reason I don’t personally guarantee a specific number of days to close, is because my capacity changes monthly, as does the fluctuations of loan production. I especially wonder about this issue come April when the first time home-buyer tax credit expires. There will be a huge increase in loan capacity with many lenders and it will be more of a challenge to meet such quick and high expectations.”
You stated: “So according to Gary the reason he does not provide a guarantee is he cannot always get them done that quick, the reason Justin and Steve do provide the guarantee is because they are sure they can get them done that quick.”
I never once said what you stated.
This comment was originally posted on Arizona Mortgage Team
Steve….
Let me ask you one simple question since this person, Justin Mchood, works for you as a commentator and no longer as a loan officer. I have done some research. Is he closing these loans in 10 days? Is it just you and Steve? This is what Justin said up top in his post.
“We can get your loan closed in ten days. And we guarantee it.”
Look… I understand the premise behind this blog. It’s called marketing and that is what Justin does for you all to make the phones ring. Because yes, you can close a loan in 10 days. I can too… again, but the statement that Justin makes… “We can get your loan closed in ten days. And we guarantee it.”
So question number 2… are these on selected loans? Can you close 203-k loans in 10 days? Can you close USDA loans in 10 days.. even after the fact that it can take the USDA to underwrite a loan in 48-72 hours… on top of your underwriter… What about loans that don’t get approved DU? Manual underwritten loans can take a little longer to underwrite than a approved loan in the system. In your statement that we can guarantee 10 day closings… loans closed in 10 days. Another question.. when does the calendar and clock start ticking? When I turn a loan in, in many cases, it might be 90% to 95% complete… what about title? What happens if there is a judgment on title? Or does you 10 day close guarantee have a list of things that you state just in case these things come up. What if the market picks up and it takes appraisers 3 days just to get to the property and another 3 days to get you the appraisal back? That’s 6 days… There are so many uknowns, yet you just flat out say,.. we can guarantee your loan to close in 10 days. Is this date of the contract? When do these 10 days start? Business days? Total days?
Lastly, Steve, you talk about investor relationships… I think you missed my point on this one. Are you a broker? Are you a mortgage banker? You talk about how everything is done under one roof. Do you have your underwriter in-house, that works for your company? A contract underwriter? Or is the lender that you sell your loans to, that they underwrite them for you, that they are in the same building with you?
Because my point about lender-overlays, I know all too well about these. Here is how I define your argument.. when I speak to a client, I screen them and pre-qual them… I know most issues upfront, as long as they were honest with me. We are a mortgage banker and sell are loans to companies like CITI and First Franklin after the loan closes. So my relationship with that investor only really matters on the funding side. Sure, if we sell them enough business, will they led us slide on something and or if I need to send a specific file to them directly, because it might be something that they won’t let us underwrite, sure, you need a great relationship. My whole point? Knowing my investors overlays upfront will not slow my process down. Knowing what my underwriter looks for and what he or she will stip for, loan conditions, is what is important. Yes, we follow other companies guidelines and or overlays. But to advertise that this relationship is very important when it comes to closing loans in 10 days? It only sounds much better to the average person that doesn’t know how the back end of the mortgage process, how it all works. Yes, it does sound better and that is what marketing is all about.
To end this… I commend you all for your marketing efforts… what I see is misleading is that you don’t get into specifics. Can you close every loan in 10 days? What is your process of determining which loans you give the guarantee to? When do the 10 days start? My last and final question… I am a realtor and I come to you today with a borrower that needs to close in 10 days because the other lender screwed up….. and nothing has been started…. are you then telling me that you will give the guarantee right then and there? My point? You don’t mention who falls under the guarantee… These are my thoughts and opinions… but because I understand 110% how mortgages work and the whole process. thanks
Dean.. I am semi confused by your comments.. I do understand that you are trying to give credibility to what Stever and Justin are promising…. well, their guarantee… but you said…
“My career has become so much more enjoyable since I have found two lenders (Justin/steve and Shane) who can pretty much always assure me that we can get a deal financed in 2 weeks.”
Wait, two lenders? Yet you mention 3 names… and 2 weeks is not 10 days. In regards to being on the top? The elite? Just because I say I am the best or on top doesn’t mean this is true. Again, marketing…. one quick argument on that… just because you gave a good rate and closed a loan in days does not make someone top of the top. If my client was looking at a 30yr fixed against a 5 yr arm… even though his savings was better… but the other loan officer didn’t explain how the arm works, explain the index and margin… and about mortgage insurance and the 20% rule when refinancing… is this client getting the better deal? Maybe not… because, this borrower thought that they could refinance in less than 5 years, back into an FHA loan and get rid of the monthly mortgage insurance if he had 20% or more equity. Hhhmmm… he didn’t know the answers because the previous loan officer didn’t take the time to explain and or know…
So… who is at the top and why? Just because people say you are great at what you do? because one markets themself better than the other? Just because one is plastered all over the internet and or says Expert, doesn’t mean that they are… Just food for thought based on a comment about the elite of the elite and who to say, not much room at top in regards to Shane’s comment and the follow up by Dean… it’s great to have people back each other up on generalities… but I am all about specifics and details… thanks
This comment was originally posted on Arizona Mortgage Team
Jeff and everyone else. First, great comments and conversation. I think every comment on here brings up great points and discussion. However, there is a whole lot of dissecting that I really can’t spend the time on, so I will only comment on the last comment from Jeff. Jeff, you bring up a very good question. Unfortunately, it’s impossible to answer with specifics. See, “the top” is just as open as “success” is. It’s based on individual perception or opinion of whatever “it” is. In my perception/opinion, if you can stand out above the rest in this industry… welcome to the top. Our industry has cleaned itself out over the last couple of years, but there is still much mediocrity. A referral partner, ie. Realtor, doesn’t really care about the specifics of why turn times are taking as long as 60 days with some lenders. They also don’t really care about how we can get a loan done in 10 days (or 2 weeks, if we’re splitting hairs). They just know that one lender is taking a lifetime and another lender is more than fast. Somewhere in the middle of the two is… the middle. I don’t know how your business is structured, but based on your comments, I would venture to guess that it’s running a similar model that the other lenders mentioned here are. If your model allows you to close in 10 days, great. In my opinion, welcome to the top. I don’t need to stroke your ego or back you up, as you say. You already know your good and that you are capable of delivering better than the middle and the bottom. The referral partner just cares that you can. Dean is backing up a generality, because he really doesn’t care specifically how we do what he can rely on. …and he shouldn’t care. He doesn’t need to.
The comment I made wasn’t about the elite of the elite. However, I do stand by not being much room at the top. There never is. If every lender in town can do the same thing that our models allow, then guess what? We’re not great anymore. We’re just like everyone else. Then we have to fight to be different, to deliver better.
This isn’t a lender thing. This is a business thing. Every business deals with it.
I do agree 100% about what you said about a person being all over the internet or labeling themselves and expert. Anyone can say they are the “best” or an “expert”. Those people just have to prove it. Then, the referral partner or client can decide if they lived up to the hype.
Great, now I’m rambling…. anyway, great conversation. Everyone keep kicking butt.
This comment was originally posted on Arizona Mortgage Team
Like Shane, I really don’t want to spend a significant amount of time providing a response to your questions — because most of them are already answered. So, I’ll get to the heart of the matter.
Why do we advertise a ten day close AND guarantee it? Because we close loans in 10 days or less.
What are the requirements to meet the 10 day close guarantee? The terms and conditions are easily found at http://www.tendayclose.com.
Many of the answers to the questions that you have posted were already answered in the original post or here. http://www.arizonamortgageteam.com/can-the-ten-day-close-be-trusted/
If you have more questions and want more details, call me at 480-329-3346.
I know that you are insisting that “… it’s marketing …” and you are correct. We are marketing the fact that we have a 10 day close guarantee because we have the ability to close loans in 10 days or less.
I’m not sure what caused the rambling of “In regards to being on the top? The elite? Just because I say I am the best or on top doesn’t mean this is true.” All we have said is that we close loans in 10 days. If that gives us a competitive advantage, so be it.
Finally, you will note that many of the points that you referenced and contributed to Justin were written by me in either posts that I wrote or responses that I wrote.
This comment was originally posted on Arizona Mortgage Team