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Closing Dates Mean Nothing To Most Mortgage Lenders

I have noticed more and more that the closing date in the real estate purchase contract is getting harder and harder to keep as a firm date

. This is not due to anything the buyers or sellers have done or not done or anything the buyers agents or listing agents may have done or not done, almost 100% of the time, it is due to the actions (mostly inactions) of the mortgage lenders.

I have discussed this with other agents and even with the closing attorneys, and most agree that most mortgage lenders have a total disregard for the closing dates set forth in real estate contracts.

When I say mortgage lenders, I am mostly talking about the lender employees that work behind-the-scenes, not the loan originators. The loan originators do seem to care about the closing date but unfortunately they are not making the behind-the-scenes decisions. The processors and underwriters seem to have this Ill get to it when I get to it attitude. They are sitting at a desk somewhere (shielded from the stress and feelings of helplessness of the involved parties) and could really care less about meeting a closing date in a real estate contract. I actually dont think they even look at the closing date in the file. I think they prioritize the files by how long they have been sitting on their desk and not by closing date. The closing date in the contract is a binding date by all parties involved except for the lender.

The loan originators have the borrower and possibly the agent that gave them the referral to answer to. Most originators understand the meaning of customer service and know that if they piss off every client they ever have, their careers will be short-lived.

The processors and underwriters usually have very little contact with the actual borrowers or the agents. They look at the file as just another file piled high on their desk; just another mundane task that they have to do everyday as part of their job. I wonder if they knew how their disregard for the closing date adversely affected those involved with the transaction, would it make a difference.

I have heard such excuses for delays as:

Since 9/11 new rules have been put in place

Home Land Security has a new requirement

We lost your original loan application (we got this one on the morning of the closing)

The computer system wont let us print the package or send the package due to a glitch

The loan has to be reviewed by two underwriters

UDA is backed up (we get this one a lot)

The underwriters are swamped (when asked why with fewer loans being made would the underwriters be swamped, the response is the staff was downsized and now we have fewer people doing the work which makes me think hire some more employees!!!.)

We forgot to send out the verification of income

We forgot to get the necessary info from the HOA

The money wire was initiated too late in the day

And these last two are priceless:

The processor was on vacation last week

The underwriter was on vacation last week

From the buyer or sellers perspective, when trucks are loaded, houses are vacated, proceeds are needed for the next purchase, furniture is set to be delivered, utilities are scheduled to be turned on or off, and movers are scheduled the last thing they want to hear is the underwriter was on vacation!!!.

The attorney that I use on a regular basis just told me yesterday that they are thinking about not even scheduling a closing date until very late in the process (like upon approval with conditions from the underwriter). She said that this week they had 6 closings scheduled and every one of them had slipped, with none closing on the contracted date. So that is six sets of buyers and sellers that are unhappy with the process due to the lenders inability to do their job in a timely manner.

I wish the processors and underwriters could see the stress they are creating by their disregard of the closing date. No matter how wonderful the loan originator may have been to the borrower, when it comes time to buy another house or refinance their loan, if their closing date was missed, I dont think they will be giving their business to the company that caused the unneeded stress related to the closing.

I dont know about other real estate agents, but I will do whatever is needed to make the customer happy and get the transaction to a successful close. My career depends on my superior level of customer service. I only wish the behind-the-scenes employees in the mortgage industry knew the meaning of customer service and made even a feeble attempt to meet the closing dates. Unfortunately I dont see that happening in my lifetime. Im afraid we are stuck with the Ill get to it when I get to it attitude.

Of course not all lenders treat their clients this way and that is why it is so important to select the right lender. REALTORs have the opportunity to see first hand which companies have customer service as a priority and which ones that does not. When a REALTOR makes a suggestion to their clients about a particular couple of lenders that they use on a regular basis, potential buyers should take that advice seriously.

by: Kevin Burrus
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Closing Dates Mean Nothing To Most Mortgage Lenders