What could possibly go wrong with my lender?
Posted on Friday, July 27th, 2007 at 5:42 pm.We often have buyers ask us if there's any type of problem with them using a lender from LendingTree.com or other lenders which aren't local. The answer is complicated, but then again, that's why you're here reading this FAQ, right? So let's delve into the issues:
The first thing to know is that at the end of the day, many, many lenders will be able to provide you a loan. Your job is to pick the one that's best for you, and it's our job to give you the knowledge and advice to make the best decision.
It really doesn't matter if a lender is local or remote, as long as they can live up to their word. The "living up to their word" is were problems oftentimes crop up. We (and most Realtors) much prefer using local lenders because when there are problems, we can easily fix them.
So, what kinds of problems could crop up, anyway? Here's an example, and as we see others we'll keep adding more examples to the bottom of this page. In this example, the buyers decided to go with a lender that our agent didn' t know because they were getting a slightly better rate. Four days before closing, the lender dropped this bombshell:
From: Jane Doe Lender Sent: 27 July 2007 17:09
To: Jack and Jane
Subject: RE: Some documents for my loanJack and Jane,
i may be on holiday but very connected here so we are pushing as hard as we can---underwriting takes time so Monday may be the day to get done--and trust me it WILL be done and closed --One glitch is that original second trust lender cannot handle the pounds for salary so we had to switch to CITI BANK where the rate is a bit higher at 9.5% but the good news you will have CITI for both first and second trust and once you get closed and have made a month's payment--you can go in and re-negotiate it--so this is a temporary situation and I will help you with it after we get closed...but this is the best solution to get to the closing table on time. Thanks for understanding. Always available by cell-- Jane Doe is working hard to pull things together and I am talking to her all day. We are indeed global.
In the email above, the lender is saying that she would not be able to honor the orignal second trust rate and the rate would be higher!
Another reason to choose a local lender is because when you're making an offer, having an approval letter from a local lender helps the seller feel more comfortable with your contract.
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September 4th, 2007 at 10:37 am
Nice post Daniel. This happens all the time and we warn our buyers against using an online lender that they or we have not relationship with.
September 10th, 2007 at 8:27 am
I would hope that all of you have an excellent relationship with your mortgage broker or lender. Not only excellent, but that lender has taught you how to cross sell them and they know how to cross sell you. This way you can be sure that your clients will be with the very best. Ask your client who is looking to go with that person they found on the internet if a quarter point is well worth the angst and misery that can occur due to these “unforeseen” circumstances.
Take a little pride in your professional relations and you will be rewarded!