It’s not my original statement, but that does not make it any less true.
In today’s market with the challenges faced by every borrower in getting approved the most important thing to remember is that time kills deals. The funny thing is that it really whacks borrowers and if you get caught in the vortex of time killing, your deal will die. It becomes a bit of a death spiral.
The whole business is still built on the idea that you can close loans in as little as 30 days, if everything goes perfectly. But given the compliance challenges, it can be tough.
Just in the last month the following things tied up just one transaction, and though they are nobody’s fault, they still “whacked” the loans just the same.
1. A loan appraised for less than we thought and had to get moved from a standard loan to a HARP loan.
2. Said appraisal took over ten days to complete as it was a rental property that was a bit of a challenge to get access to.
3. The HARP loan did not require an appraisal but the appraised figure made it into the loan file (as it should have) but somehow could not get corrected.
4. Because of the confusion the file got tagged for a Quality Control audit.
5. With the file being subject to the QC audit, the underwriter added some conditions and took a few extra days in being cautious with the approval.
6. The market moved against the borrower with all the delays.
7. The borrower gave up because the solution offered at approval no longer was the great fit that the preliminary approval/rate/payment was.
Oddly, everyone is doing everything correctly but it’s not helping clients, not helping companies close loans and in the big picture not helping the economy.
We have to be better as a business or nothing is going to get fixed in this economy.
