On February 2, 2017, our office closed a transaction that was originally scheduled to close on October 27, 2016. The effective date of the contract was September 13, 2016. It was a renovation loan, which is why we had written the contract for more than 30 days. We had communicated with the lender and were told that there shouldn’t be an issue with getting it closed on time. Twenty four hours after the buyer had signed all their loan documents (142 days after the effective date of the contract and 98 days after the original closing date), the title company was still receiving revisions on the Closing Disclosure. The whole transaction was a nightmare for everyone concerned.
This transaction was a worst case scenario, I hope. I have been involved with transactions where the loan officer just stops communicating with the buyer or goes on vacation outside the country in the middle of the transaction without telling anyone and the transactions have been delayed a few weeks. I have been involved with transactions where we have had to climb the chain at the mortgage company to find someone to jump in and get the loan moving again.
My team works with a lot of really great mortgage originators and companies, none of whom have left our buyers hanging out to dry. But we know that there are a lot more lenders out there that we have never worked with who are just as good. The trick is picking out which ones are the good ones! While we hope that our buyers take our advice and at least talk to one of the lenders we recommend, often times buyers come to us with a family friend or someone from their softball team or a neighbor. Too often these loan officers/loan originators, while they may be really great people, don’t have the “right stuff.” Or the company they work for isn’t in the business of customer service.
If you decide you really do need to give your neighbor a chance, then at least ask them some questions!
1. What is your policy on returning phone calls and emails?
This is important not only for you, but for your realtor. We all need to be able to communicate effectively and in a timely manner. My office needs to be able to find out where the loan is in process so we can keep the seller’s agent informed.
2. What does your “team” look like? Do you have a processor? Where is he/she located? What about your underwriting staff? Can you actually talk to the underwriter? Where are they located? Is there an appraisal review team? Where are they located?
Local processing, underwriting and appraisal review are great, but there are some companies that have such a great process that having them in a different location is not a bad thing. Asking the questions will help you determine if that processing, underwriting and review team is working – wherever they are!
3. Do you attend closings? What percentage of your loans close on time?
The interesting thing is that the loan officer for the transaction from Hades actually showed up at closing and wanted to shake my hand – really? The second part of this question is more important apparently!
4. Where does your business come from? What is your customer follow up/retention?
Loan officers who are responsible for generating their own business focus on customer service because they are going to have to ask for referrals. They will be attentive and will want to make sure that the loan process goes smoothly and surprises are kept to a minimum.
Loan officers who man a phone bank and get their business by answering the phone are less likely to need your referral or repeat business.
5. Are you accessible after regular business hours? Will you be available to meet with me in person if I have questions that can’t be answered over the phone or in an email?
Not if they are in Minnesota or Tallahassee or Dallas and you are in Kansas or Missouri.
6. How long have you been a loan officer?
There are advantages to having been in the industry for 10 or more years. It means that the loan officer made it through the housing crisis in 2008! However, if the loan officer is with a good company with a good support system and processing department or if they were a processor they might be just as good.
7. Do you have some past clients that I can call?
References are good
8. What loan programs do you offer?
Not all lending institutions offer all loan programs. Make sure that you feel you are getting all your options and not being pushed down one trail.
9. Will you send me a closing cost worksheet before I have a contract?
You cannot compare fees (interest rates change, so you are looking at fees) unless you have a standardized document to compare!
Just like realtors differ in their approach to customer service, negotiations, closing procedures and after the sale follow up, not all loan originators are built the same. Choose this person carefully. They have a large portion of your financial future in their hands.
Keller Williams Realty Diamond Partners, Inc
913-322-8301 office direct