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That is a very frustrating process right now. At the last minute before closing, the underwriter looks at everything again.
- They pull your credit reports again to make sure nothing has changed (never open a new credit account or buy anything large if you are in the process of buying a house).
- They look at the source of your closing funds and if it comes from some other place than what you originally said, they will want full disclosure of the source of the funds.
- I just had a buyer that was selling their house to a cash buyer. The sale was scheduled to close a week after their purchase, so they had time to move. At the last minute, the underwriter did a desk-appraisal on the home they were selling without ever seeing the property and decided the "value" was $50K lower than the contracted sales price. Thus the purchase of the new home would have to wait until after the sale. It caused a day or two delay but we managed to pull forward the sale of their house and do a 1-week holdover on possession. But it was really stressful to my clients
I'm sure many other people can chime in on all the other last minute things the underwriters do.
We have the lowest rates, EVER......Everyone refinancing, including those that refinanced in 2009 and early 2010. Others are trying to get a real deal on short sales, which clog up the system so much so, we try to keep them out of the system until the short bank has approved the sale. We have the entire world hating banks, banks with auditors crawling all over them, looking for every possible misstep.......so loans need to be reviewed over and over to make sure they are right.....and we have employers (banks) refusing (out of fear) to hire additional employees to handle the additional workload - the new health care requirements are still being felt by employers. Everyone in the industry works 12+ hour days, coming home to more of the same.
As I told someone the other day, everyone's doing the best they can with what we have.
We have the lowest rates, EVER......Everyone refinancing, including those that refinanced in 2009 and early 2010. Others are trying to get a real deal on short sales, which clog up the system so much so, we try to keep them out of the system until the short bank has approved the sale. We have the entire world hating banks, banks with auditors crawling all over them, looking for every possible misstep.......so loans need to be reviewed over and over to make sure they are right.....and we have employers (banks) refusing (out of fear) to hire additional employees to handle the additional workload - the new health care requirements are still being felt by employers. Everyone in the industry works 12+ hour days, coming home to more of the same.
As I told someone the other day, everyone's doing the best they can with what we have.
I agree with almost everything SmartMoney just said.
My fiance and I are FTHB and we went with bank of america... let me tell you, bank of america is dragging their feet! We gave them everything they needed, but because of their new proceedures and "busy" underwriters, we have yet to close and it's been 15 weeks since we signed a contract with the sellers. We were supposed to close Oct 14, but bofa couldn't make that deadline. We got an extension from the seller 3 times and with the seller being Fannie Mae, they are required to put the house back on the market if it can't close within 90 days. BofA told us it would be no problem to close in time, but they dragged their feet and was a day late getting our file out of underwritting and audit. So we had to re- place an offer on the house all over again. Fannie mae accepted AGAIN and we went to escrow to sign our papers. Thinking we were almost done on closing day and with papers being signed by both us and the seller, all that was left was our lender to close the loan... but they sent me an email the day of closing saying bad news.. we need to redue all the paperwork because you signed a new contract with the seller. WE HAD TO because we lost the house and they knew that and knew we had to place an offer on it AGAIN! all because bofa is incompinant of doing their jobs correctly in a timely manor!!
My fiance and I are FTHB and we went with bank of america... let me tell you, bank of america is dragging their feet! We gave them everything they needed, but because of their new proceedures and "busy" underwriters, we have yet to close and it's been 15 weeks since we signed a contract with the sellers. We were supposed to close Oct 14, but bofa couldn't make that deadline. We got an extension from the seller 3 times and with the seller being Fannie Mae, they are required to put the house back on the market if it can't close within 90 days. BofA told us it would be no problem to close in time, but they dragged their feet and was a day late getting our file out of underwritting and audit. So we had to re- place an offer on the house all over again. Fannie mae accepted AGAIN and we went to escrow to sign our papers. Thinking we were almost done on closing day and with papers being signed by both us and the seller, all that was left was our lender to close the loan... but they sent me an email the day of closing saying bad news.. we need to redue all the paperwork because you signed a new contract with the seller. WE HAD TO because we lost the house and they knew that and knew we had to place an offer on it AGAIN! all because bofa is incompinant of doing their jobs correctly in a timely manor!!
The big box banks have been a frequent topic here with their slower than slow turn time. Had you read the BofA threads here first, you most likely would never have gone there. The boxes are overrun with trying to refinance their own portfolio, let alone trying to handle new business. Maybe your words will be a cautionary tale for others.
They are just people doing there jobs. Now so many are watching they always try to cover their butts. I had an underwriter from BOA send me an entire mortgage package with a totally contrived incorrect name on all of the papers. So while they are digging through your closets they often pay no attention to their own mistakes. Watch them like they watch you. Real estate in general can be a very shady game all around.
I had read all the horror stories about big banks so when we got a mortgage last year we went to a midsize local bank hoping to avoid problems. Turns out they contract out their loan underwriting somewhere out of state. Missed closing by one day but that shouldn't have happened. We have excellent credit, house appraised for $25,000 more than we paid, guaranteed life income (civil service retirement) and income/payment ratio of about 20%.
Moral of story - find out if the bank does their own underwriting.
I had read all the horror stories about big banks so when we got a mortgage last year we went to a midsize local bank hoping to avoid problems. Turns out they contract out their loan underwriting somewhere out of state. Missed closing by one day but that shouldn't have happened. We have excellent credit, house appraised for $25,000 more than we paid, guaranteed life income (civil service retirement) and income/payment ratio of about 20%.
Moral of story - find out if the bank does their own underwriting.
As a general rule, yes. But, here's where you wouldn't know - no one is willing to hire permanent employees right now, the reason why things are really backed up. So if a bank that does their own underwriting suddenly gets slammed, it's common practice to contract out underwriting to a PMI company. The loan officers on the "front lines" would tell you yes, the underwriting is done 12 feet away from them, only to find out 4 days ago, they started sending out to a PMI company.
What sounds archaic about your scenario is your statement about "out of state." Almost all underwriting is now done electronically and without paper files. It shouldn't matter if the underwriting is done under the same roof as your underwriter or six states away. However, since my underwriter does sit 10 feet away from me, I do sell that point, it's all about perception........but I also get the same service when I submit to the underwriter in another branch office, many miles away.
Finally, I assure you the delay had nothing to to with the qualifications of your file, but everything with the sheer volume lenders are seeing with historic low rates. It's hard to rubberstamp a file that's 30 files out from being reviewed. Refinance files should be taken in the order of submission, not the order of qualification. When that happens, the lender is reaching for the good files and will get their hands slapped in a heartbeat. Missing a closing by 1 day probably has some here envious of that kind of delay.
I opened an escrow on 10/12 and the lender promised 30day closing was no problem then they made a couple of mistakes and overestimated my qualification etc so that caused some delays in the beginning but they found a workaround and finally approved my loan and got everything ready to close. I signed the closing doc a week before Thanksgiving. I was thinking I will use Thanksgiving weekend (4day) to pack and move. Then they told me last minute since they couldn't sell the loan to their regular investor WellsFargo because my property was a flip(I was told WF doesn't buy flip property loans), they had to submit the loan to GMAC and now this new investor GMAC asked for more docs from my lender so that is causing another delay so I ended up spending Thanksgiving wknd waiting for their answer. At this point, I had already signed the closing doc AND wired the closing cost to the escow company so all my money is sitting in the escrow account. Today is 12/1 it's been almost 2 weeks since I signed the closing doc. They told me they submitted all the docs GMAC requested so it's matter of time that GMAC signs off on my loan but I am losing faith in my lender because I thought since I signed with them They are the responsible party to close the escrow not the big banks they sell my loan off to.
But I'm already vested in this process for 1 and half month and paid all the appraisal fee, condo cert, credit report etc out of my pocket although my agent tells me the big chunk of my money is safe because they didn't sign off on loan contingency with the seller I am afraid this whole thing will fall through and I will end up with nothing. If it's a matter of waiting and delays from the bank because of the workload etc, I'd try to be more patient but I am wondering if there's another process GMAC has to approve my loan because as I mentioned before they had issues with approving my loan in the beginning mainly because they couldn't count the rental income from my departing property because now they require 30% of equity when you leave a property and claim it as a rental but I don't think my departing property has 30% of equity yet.
My lender found a workaround and approved me anyways since I had it already rented out and submit the proof of the lease contract but I'm not sure if GMAC will look into that again and make an issue out of it.
Any insight would be appreciated.
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Underwriters
