As mortgage rates shot higher recently, our Veterans have continued to get the short end of things in the real estate market. This is causing unforced errors in a market that is already stressful enough for buyers, sellers and their agents. Most importantly, it’s causing qualified Veterans to lose the home they want for themselves and their family. What’s the problem, you may ask? Call center lenders.
Overall, call center lenders that advertise on the weekends during football games and golf tournaments all while wrapping themselves in the flag and even implying that they are a government agency or affiliated with the military are spending their money on advertising to make their phone ring and NOT on the execution or closing of those loans. The amount of “saves” that we do here as a company to come in after a loan has been declined and actually get it approved and to the table is amazing. We did at least 5 of them in the last month!
How do call centers mess things up? Here are the top two ways that I see, but there are MANY more. First they fail to pull a Certificate Of Eligibility (COE) at the time of pre approval. This is the biggest sign a lender or Mortgage Loan Originator (MLO) may not be thoroughly vetting the borrower. The second is not understanding the resources available to help a Veteran get the loan approval after challenges hit from either an appraisal value issue or as soon as something doesn’t meet guidelines perfectly they throw up their hands and say there is nothing they can do, sorry.
In the last month I have seen the following from various lenders that are truly “call center” operators. First, a Veteran was denied by a lender because their COE originally stated ineligible. Turns out a twenty minute call to the regional lending center fixed this because they did have the required service time. So we got the borrower approved for the next loan, but he lost the first house he targeted, six weeks of time and $1000 on appraisal and home inspection. Second, I was called into a closing by a title company in my office building where the Veteran was at the closing table, but the call center lender never bothered to verify the earnest money deposit in the transaction. This meant that although they only had to bring a few hundred dollars to the closing table, they had ZERO verified. This means the loan was not literally not approved when the documents were sent to closing. Nobody double checked it and they made the Veteran sit for six hours while they went about solving it!
Our Veterans deserve better. There is an entire cottage industry built on profiting on Veterans VA loan entitlement. These call centers do the minimum amount of work, in volume, and figure that they are making money and “hey accidents happen” or “you can’t make omelets without breaking a few eggs”. But what they don’t understand or don’t care about is that these are people’s lives you are messing with. Not just the Veteran and their family who are trying to get into a new home but the sellers, realtors and other professionals who get jammed when a transaction that can be closed gets screwed up instead!
So the first, best move is to pursue working with a local lender with expertise in VA loans. This allows for accountability to everyone in the transaction. How do you confirm they know what they are doing? Well a good first start is to ask them if they have pulled your COE? It’s the first strong sign they know what they are doing.
Secondly, if you or your client have been denied a VA loan, get a second opinion and do it before you cancel the transaction. I know it can be a pain to change lenders late in a transaction. But given the amount of saves we do, it makes sense for you to get a second look and either get a fast no from us because something obvious was missed weeks ago or get on the path to getting things fixed! Sometimes the fix is really simple to the point of being silly with the COE or an appraisal. Other times, you just need to find a lender like us that has no “overlays” which means the Automated Underwriting system says we are good with your 597 credit score, cash in the bank, residual income calculation, etc. we don’t have any additional thresholds to meet.
Regardless, don’t let the call center lenders gum up the works. Veterans and their closeable transactions are being denied their loans by these companies. It’s not serving Veterans, it’s downright wrong, and it’s completely avoidable.
