The biggest delay in the mortgage process are when borrowers do not provide requested documentation and the documentation is not provided early enough in the process.
Below are 7 examples of mortgage process issues and SOLUTIONS:
- Providing documentation very late in the process which can cause a delay in the closing, rate lock expirations, or even a late denial notice because we received important information that could have been reviewed earlier. Solution: Provide all documentation very early and preferably prior to going under contract on a home so we can talk with confidence on loan approval as well as close quicker upon obtaining an accepted contract
- Missing schedules of a tax return. We often will have just the first 2 pages of a tax return but lenders require all schedules because there is valuable and required information to review such as other properties owned, other mortgages existing, unreimbursed employee expenses which lowers the income, etc and seeing these early on is very important. Solution: Provide all pages of the last 2 years personal and business returns or better yet, have the accountant forward the whole returns to us via email.
- Missing pages of bank statements. This happens the most where we are missing several pages of asset statements. There are very important items for a mortgage company to review on pages after page 1 of the statement such as generic deposits that need sourcing so we can verify if it is a new loan, gift, or undocumented deposit, NSF charges, proof of income received through direct deposits, new loans not on credit yet, and many other reasons. Solution: If the statement says “page 1 of 7” for instance, provide every single page of the 7 even if the middle of it says “this page left blank intentionally” because keep in mind, we don’t know it is blank until we see it
- Printing a daily history of a bank account rather than provide a bank statement. The reason this is a problem is that the daily history print out often will not have all of the information needed to prove it is actually a bank account such as missing the borrower’s name, the bank name, and account numbers. Solution: Provide the actual bank statement with all pages. We often get told that the bank doesn’t provide statements but almost every bank does and you just have to look for “view statements” or “statements” on the website.
- Copies are not legible or are cut off. Keep in mind that copies may get faxed or scanned to us and then we need to upload them so a clear copy is important. Solution: When copying or scanning, look at the document for complete accuracy before sending.
- Providing a good and detailed explanation letter. A borrower needs to take it seriously when we ask for an explanation letter to explain issues on credit. Saying “I don’t remember” or “I forgot to pay” on a bunch of late payments will not work. Solution: Really think about what happened, explain it by painting a picture to let an underwriter know what unexpected circumstance happened, how you solved the situation, and make it a point to show how in the recent past payments have been made on time (assuming this is correct) and a plan of how this payment will be made on time without creating a hardship. So really paint that picture to show an underwriter why the loan should be approved.
- Not providing all information requested. We are very detailed in the items we ask for and they are tailored to our borrower’s financial situation so it is very important that we receive this information. Solution: To save being asked for the items again, which borrowers often feel like we are asking for new things, give us the items on the list up-front. It will allow us to know early in the process if we have a closeable loan, if there is a problem that notifies the borrower of a denial (but at least early), or that we have something that we need further documentation on to clarify.
In conclusion, provide us with complete documentation and what we have asked for, it will make everyone’s lives a lot happier during the mortgage process of a purchase or refinance. If you are a realtor or builder, make it part of your initial discussion about how important it is to gather a complete loan documentation package to us as early as possible. Whether it makes the closing go faster, a denial known earlier to save the borrowers money and saves everyone in the purchase their time, or less complaints from the borrower, you won’t regret it!
Team Move lends in areas such as Wilmington, Leland, Hampstead, Jacksonville, Camp Lejeune, Whiteville, Shallotte, Southport, Elizabethtown, Lumberton, Fort Bragg, Pope Air Force Base, Fayetteville, Rockingham, Raleigh, Garner, Smithfield, Clayton, Goldsboro, Charlotte, Greensboro, Winston-Salem, Durham, Chapel Hill, Burgaw, Castle Hayne, Holden Beach, Supply, Ocean Isle Beach, Sunset Beach, Hubert, Tabor City, Carolina Beach, Kure Beach, Laurinburg, Topsail Beach, North Topsail Beach, Surf City, Sneads Ferry, Richlands, Wrightsville Beach, New Bern, Oak Island, Saint James, Wallace, Sanford, Pittsboro, Apex, Cary, Raleigh, Holly Springs, Fuquay Varina, Siler City, Southern Pines, Aberdeen, Pinehurst, Whispering Pines, Vass, Spring Lake, Fayetteville, Lillington, Hope Mills, Dunn, Angier, Smithfield, as well as the rest of NC. North Myrtle Beach, Myrtle Beach, Conway, Loris, Little River, Longs, as well as the rest of South Carolina and Virginia.
Author: Russell Smith
Team Move OVM Financial loan officer success is Russell’s primary focus. He provides the tools and techniques he used as a top producing loan officer. Additionally he offers the Team Move OVM Financial Agent Training Program. Sharing is so important to Russell so he works diligently to be a resource to loan originators and Realtors.