We live in a post-subprime world...and with that, come some good things and some not-so-good things. Much of the “bad” in mortgages has been cleansed (bad loan products and many of the unqualified "professionals"). And that is good. But another consequence of the past five or so years is the shear loss of people who can fulfill the demand of today’s public.
As an industry, we are short appraisers, loan officers, processors, underwriters and closers and things are getting backed up.
With rates at (or near) all-time lows and some of the government initiatives kicking into gear (HARP 2.0 and FHA Streamline, as examples) refinances are plentiful. At the same time, sellers have become more realistic in pricing expectations and buyers are jumping off the fence. What sounds like great news is truly not-so-great.
Normal turnaround times are being strained. Appraisals are delayed. The number of files has processing and underwriting unable to keep up. Answers about getting project approvals are being set aside.
What does a lender do?
- Do you hire more people with the notion that you can just lay them off if rates go up?
- What about the time, energy and expense involved in training them if this need is short-lived?
- Do you work the current staff so hard that they burn out or can’t deliver the customer attention you would like?
Or do you come clean and reset customer and referral partner expectations? While we all do value our clients, we need them to understand that volume is exceeding capacity. At the same time, many things are just plain outside the direct control of your lender.
My advice is to gather as much of the required documentation as you possibly can before your mortgage application. Make your file an “easy” one to get through. Talk to your loan officer about expectations and the best way to communicate so disappointments are minor. Buying/selling a home is emotional and pressure-filled for sure. And now, we have time constraints to add to that. Preparation and planning (along with some patience) can go a long way.