How Long Will It Take To Close My Loan?

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

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?"

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!

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 !!!