Buying Real Estate in 2011
With nine years in the real estate industry, I have to come clean.
I have to admit that I have never experienced more crazy times when it comes to underwriting a loan. Just a few years ago, when the loan officer told everyone that the loan was in underwriting, it was a fair bet that the loan was going to be approved. There may have been a couple of conditions that the loan officer missed up front, but in most circumstances, the loan was approved with little or no hiccups, coming through underwriting.
Fast forward to 2011
Ok… Time to come clean again.
I wrote on this underwriting “epidemic” last year and was politely told by some friends in lending (specifically Dan Keller, Seattle, Bellevue Mortgage Guy) that much of the underwriter’s push back was coming from a lack of clarity in the purchaser’s information collected by the lender. While I can and will put a lot of credence into what Dan brings to light, there is still something that has been missing from that excellent explanation, at least from practical experience and anecdotal evidence from other agents.
Today, I threw last year’s post on underwriting out across Facebook. Very quickly, Lynn Parker, someone from the title company side of the real estate industry replied:
While a blunt statement, for sure, it is no less true. But why?
Why is the underwriting process orders of magnitude seemingly more intrusive than a TSA pat down?
Another lender, First Commerce Financial, published this helpful video on why underwriter’s have been particularly sticky:
httpvh://www.youtube.com/watch?v=Yy-P6BQfiXQ
The Take Away
To summarize the video: when an underwriter smells something funny, they may not be able to correctly articulate what or why something smells funny.
It does not matter what side of a real estate transaction you are on; you WILL need a BIG BAG OF PATIENCE.
This “new wrinkle” in the lending process only serves to emphasize the importance of a real estate agent that understands the process and is NOT primarily concerned about their commission at the closing.
A true real estate professional will be focused on one thing, and one thing only:
YOU.
A consummate real estate professional will be able to recommend a loan officer that can get the job done, collect the right information up front, but also be able to explain why the underwriter is asking for more information. Sometimes, as alluded to in the video above, it just doesn’t smell right to the underwriter. A good loan officer will be able to tease out of the underwriter more specifics than just, ‘it doesn’t smell right.’
What has been your experience in this market?
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