I wanted the first blog entry on my website to be something interesting and important and pertinent to the mortgage industry. Of course, trying to write about something interesting in regards to the mortgage industry can be challenging at times. I think that most people nowadays think of words like “frustration” and “challenging” when it comes to trying to obtain a mortgage in most cases. We are a service based industry but unfortunately due to the rules and regulations that are placed upon us these days, the service aspect is often not on the forefront of the process. The reason for this, and I am sure that most lenders would agree, is that we are so focused on trying to make sure that the transaction happens on time while handling all of the paperwork that has become such a burden these days due to increased regulations, that we can often lose sight of the most important part of the transaction…..the CLIENT.
Most people that have gone through the mortgage process over the last several years would likely be able to tell you how incredibly invasive that it seems. I agree with this to a certain extent but at the same time, you have to think about what information would you want to see from a person if you were lending them several hundreds of thousands of dollars? With that thought in mind, it becomes a little more reasonable to assume that your credit, income and assets will be required, analyzed and scrutinizd over to make sure that you meet all of the criteria that is laid out in order to qualify for the mortgage product for which you are applying. Keep in mind that there are several different mortgage products and all are administered/governed by different organizations and they all have different guidelines. These differing guidelines affect what a lender will ask a client for throughout the loan process. I know that I try to obtain all documentation from the client up front but inevitably, sometimes the documentation that is provided will bring up additional questions and the need for additional documentation. This is where things get frustrating!
Keep in mind that when a lender asks you for documentation such as paystubs, tax returns, bank statements, etc., in most cases that is because we are required to by Fannie Mae, Freddie Mac, HUD, VA, USDA, etc. We don’t generally come up with this list of items arbitrarily, it comes straight from the governing organization or backing organization of the loan and they determine what is needed and should be requested. However, some lenders can take this a step further through what we call “overlays”. Lenders can take the basic information required by Fannie, Freddie, etc. and we can make the decision to require more above and beyond what is required. Some lenders have more overlays than others and this is where you may find some major differences between lending organizations and the ease of the same transaction in comparison.
We spend a lot of time explaining the above to people. Most eventually understand that we are not the cause of the frustration but unfortunately, we have to be the messenger and the requester of the information and therefore take the brunt of people’s frustration most of the time. I think that this is when the importance of service comes back into play. If we do our best to keep our clients informed and take the time to explain things to them thoroughly, they will feel more comfortable and generally tend to not feel as if we are being as invasive. Bottom line for pretty much everyone who is in the mortgage industry these days is that we ultimately just want to make the client happy and make the process as smooth as possible regardless of how difficult that can be. In addition to making the client happy, we also carry the responsibility of making the buyer’s agent happy, the listing agent happy, the closing attorney happy by making sure that closing docs get to them more than 2 hours before a closing and God forbid there is a bank involved on the purchase of a foreclosure or short sale, we also have to meet the time demands of that financial organization and keep them happy.
I just wanted to attempt to provide some clarity into the background of the mortgage process, the reason we request everything from our clients short of a blood sample and also point out that my main goal truly is to serve the client the best that I possibly can. Although challenging at times, I truly want your experience to be as smooth and stress-less as possible!