Dodging Deal Busters
Advice to Realtors and their clients
How many times has a deal gone south at the last minute because the loan officer on the deal could not deliver what he’d promised? How many times has a client of yours received a higher-than-quoted interest rate when they signed the loan documents? These are major problems that plague the mortgage industry that need to be resolved. When your clients use a loan officer that fails them, it very well could reflect negatively on you. How can you ensure such problems do not happen? Easy. There are three very simple steps to ensure every single transaction goes as smoothly as possible.
Calfornia Home Loan Term: A "cloud on title" is when there is condition that affects the title being clear of "defects". When competing a California Home Loan transaction, tite must not have "clouds" and any issues must be resolved to the lenders satisfaction. The title company is responsible for letting all parties involved, seller, buyer and lender, of any potential issues.
Step One: If there are ANY potential issues with getting approved, have your clients get pre-approved, rather than pre-qualified, prior to escrow being opened or the expiration of your loan contingency. What is the difference? Banks pre-approve, and loan officers pre-qualify. If a loan officer says your client is pre-approved, then ask to see the conditional pre-approval issued by the bank that will list all the conditions prior to the close of escrow. If all that can be provided is their “pre-approval letter”, then your client is not pre-approved by the bank yet; and your loan officer just “thinks” he/she can get the job done. Always, always, always attempt to have first-time home buyers get pre-approved prior to escrow being opened.
Step Two: Once you have a copy of the approval, request a copy of the interest rate lock confirmation as well. Once you have both in hand you know what is happening with the loan. Most of the time this will protect the client from any surprises and prevent the loan officer from adding an additional .25% to the rate because he/she wants to make a little extra money. Having the conditional approval from the bank will tell you all the conditions needed to be cleared prior to loan documents being signed and the loan being funded. It will give you the rate the borrower was qualified on, and the rate lock will confirm it was locked.
Step Three: Have your clients work with a loan officer employed by a mortgage broker rather than a direct lender. Why? Mortgage brokers have access to multiple wholesale lenders; and if some legitimate problem does come up that would prevent the loan from closing, the loan officer can easily shift the loan to another lender to save the deal. A loan officer who works for a direct lender is stuck with no where else to go, and the deal could very easily die because he/she can not take the loan to another lender.
Problems sometimes arise during escrow that are beyond anyone’s control. That does not mean you do not have the ability to protect your client from a loan officer who doesn’t do his/her job. By requesting copies of the conditional approval letter and lock confirmation, and by working with a loan officer employed by a mortgage broker, you are doing your best to ensure a smooth transaction for your client.
|
