Hello, LOs!
I hope you're gearing up for a relaxing long weekend with family and friends. From the sound of it, many of you could use a few days off to recharge.
In yesterday's dispatches, HousingWire Editor-in-Chief Sarah Wheeler and I both asked why closing turn times were still quite slow – in the 50-day range on average.
The industry last year collectively hired tens of thousands of workers to conquer capacity issues, and mortgage technology is more plentiful than ever.
Here's a small sampling of what we heard from LOs, real estate investors and others.
"Ineffective pipeline management, period," said one LO based in Florida. "Technology only goes so far."
A production manager in California said his company has implemented enough tech that his team is turning loans over in 1.5 weeks on purchases and about 2 to 2.5 weeks on refis. They use a digital app, single source asset verification and income/employment verification where they can and get 'needs lists' based on what they actually need. Not everyone has embraced the move to digital.
"At our company though, some LOs still do manual apps, get bank statements (then have to go back for updated documents from the borrower later instead of clicking a button to get what's needed), rely on borrowers for income documents, etc." the production manager said. "Just using the technology available I'd estimate is what shaves about a week off my team's process. Technology adoption is a challenge sometimes as many people in the industry are older and very set in 'old school' ways of doing things, or they still feel uncomfortable with computers/software, so they don't use it, and this extends the loan process quite a bit."
Appraisals that are taking "forever" in some markets are also driving up turn times, he said.
A loan officer in the Indianapolis area said turn times for he and his colleagues haven't really slowed down. Preparation is key.
"While I won't claim our processing and underwriting teams are lightyears ahead of our competition, I can point to one thing that I see many do that we do not: We do not pre-approve borrowers without already having their 'stuff' in hand," he said. "One of the things I train Realtors on is a little thing I call, 'When is that pre-approval not a pre-approval?' I ask them to read what the body of that competitor's letter actually says – and not simply focus on the word pre-approval. As often as not in the body of that letter there will be a sentence that looks something like this: 'This pre-approval is based on the borrower's stated income and assets, and final approval is contingent upon verification of those (and other) items.' I tell Realtors that there is no underwriter in the world who will issue an approval based on what a borrower says. They only approve based on what a borrower shows."
One property investor in Florida told HousingWire that he's had a myriad of issues with a variety of lenders.
"We have used brokers, banks, direct and online lenders (Better Mortgage, LoanDepot, Wells Fargo, Bank of America, Quicken Loans, Franklin Capital, and Cardinal Financial) in fully conforming, 20% down, full doc situations with great credit scores and income...and yet the purchases and some refis move like molasses in January," he said.
"Issues we have seen are related to underwriting, poor communication between agents and clients, clouds on title, and overlooked details (property surveys here in Florida)...in our experience, the use of AUWs should speed things up but too often the data is incorrect and although the initial approval goes through, the backend underwriters (people) are overwhelmed and kick files back because they have no time to investigate, make a phone call...processors can barely respond to emails...closing managers have staff retention problems."
The frustrated investor also wanted to know why the industry is still married to closing at the end of the month. "With a little foresight and planning, we should be able to spread this out," he said.
Well, what do you think, LOs? Please share your thoughts anonymously with me at jkleimann@housingwire.com. Hope you have a great weekend!
James Kleimann
Managing Editor, HousingWire
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