Mortgage lenders from out of the area failed to close or deliver funds on time in over 80 percent of the cases last year according to Pete Doty’s limited data base.  In stark contrast local lenders all performed 100% on time with only an hour or two delay at the worst. The ratio of  33%out of town lenders to 67% local lender closings. In one case, while the lender created the initial delay, the seller would not authorize funding for 4 days after the pro-ration date as a result.

Out of town lenders were mostly only over due to the closing table by a day but the stress this creates on the schedules of all involved is huge. In one case an inept loan broker had not submitted the required forms and documents causing a 14 day extension in the closing.

Any Realtor worth their salt will attempt to have you work with someone they know. Personally I do not originate loans and never have. I simply do not want to know that much about you. I have never owned any portion of a mortgage company (or a title company) as I feel there is a real conflict of interest for you, the consumer, disclosed according to RESPA or not, it just is. So when I recommend a lender, I do not see anything from the lender except a happy client at closing. And that is as it should be.

The horror stories about the clients who have their belongings on the truck to be delivered the day after closing are true. Every penny they saved in origination fees or interest rates are gobbled up in storage of their belongings. What a shame. And all we can do is sit and watch.

So what causes this huge disconnect in performance? From my perspective it seems there are 2 kinds of lenders, those huge like the government and those like small business. Stay with me…if you worked for a government agency and your computer needed to be replaced (blue screen of death-it died) what chain of command would you have to go through to requisition a new replacement unit? Would you ever actually speak to the person doing the purchasing to make sure it did what you needed? Now, if you worked for a small company you might have to walk around the corner to tell the IT guy it died and you need a new one, or just go buy it yourself making sure you got what you need.

In the above case you would be the employee whose computer died (loan officer) and the people providing the tech support/new computer are the underwriters. Having appropriate access to the right people, them knowing and respecting your work, means your file is processed accordingly. Just because I know the loan officer, I too have access, through the system, we can respond faster and be generally lighter on our feet.