Expert: Jim Hoepf - 6/12/2009

Question
QUESTION: Hi Jim,
We applied for a mortgage back in May (18th to be exact) and provided all data (bank statements etc) by the 20th.  Our loan processor got the data to the underwriter 2 weeks later.  It now seems like a blackhole has hit.  We were told we could schedule closing 4 weeks after the app, which we did, and now we are one day away and not a word where we stand.  We have a 798+ credit score, the house appraised for 15% more than we are paying, AND we are putting 20% down.  We have decided to delay the closing by 2 days, but is this realistic given we haven't hear a word from the Underwriter?  Why is this such a blackhole where you can not even get status updates out of a group like that?  Is this just a problem with the lender I chose?

Thanks
Scott

ANSWER: Scott,

I would have to say its probably the lender you chose.  A 30 day time frame is plenty of time to close a loan, especially with your situation of credit score and down payment.  As far as delaying the closing, its hard to put a definite time frame on it considering you aren't getting any answers from your lender.

This blackhole, unfortunately, is very common with certain lenders.  They work at their own pace and really have no sense of urgency.  What is your processor telling you?  Do you have a loan officer that you are working with?  If you don't mind me asking, what lender are you working with?



---------- FOLLOW-UP ----------

QUESTION: The loan processor when confronted yesterday on the issue said that they take 10 business days to get the paper work to the underwriter, and the underwriter takes 10-12 business days.  That would put us at Monday, which was our closing date.  They did NOT say this back when I decided to use them (just the opposite, they said no problem.. uhm, to me this time frame would have been a yellow light if they did the math).  They are saying they can not, because of new lending rules, talk to the underwriter other than to ask them to "hurry".  They also say they got slammed recently with the rate changes.  It sounds like excuses to me. I HAVE to leave my current residence by the 30th (we sold and closed and are "renting back" until then) and I am worried about needing to find and pay for an intermediate location.
The lender is CherryCreekMortgage. I used to use USAA but I got greedy and went with a mortgage that was 0.2% lower.  This appears to be what I get. USAA could have done this with their eyes closed.  I know this for the people who bought our house used them, and they closed within 21 days of the sale.  Go figure.

Answer
Scott,

Let me debunk a few of their comments.  The new lending rules do not prohibit them from talking to the underwriters, just appraisers.  I talk to underwriters on a daily basis to make sure they are on top of things and taking care of my files.  The rate change has been going up, not down, so the number of applications has tapered off.  It seems like a lot of excuses to cover the poor performance.

I have heard of Cherry Creek, but have never used them.  You used a word that I use with my clients.....Greed.  It happens, and we all do it thinking we are saving a buck, when in fact paying that little extra amount is worth it for the service you would get.

I would say that since you have until the 30th to move out, you should still be OK, but I would possibly ask to talk to the processors manager or the underwriting manager to get to the bottom of the problem.

Too bad I'm not working on your loan......we would have been closed by now!