Mortgage loan volume is up. That means “mortgage processing times” (how long it takes to get loans through the system) are up. As that time in processing and underwriting increases, so do stress levels. Deadlines are approaching everywhere. The only thing that typically doesn’t go up when volume goes up is customer care. One Mortgage Industry observer recently said:
I don’t care if the BBB and JD Power had a baby together and it was a lender named “Service”, when volume spikes, service slips – it’s simple economics, really – supply and demand.
There is a huge demand for mortgage loans, and a limited supply of employees trained to handle loan files. Most Mortgage Lenders cut staff and “down sized” their overhead last year when it appeared the “refinance” boom was over. Well that changed earlier this year. As OIL prices have gone down, so have mortgage rates. Folks thinking about refinances, jumped off the fence, and those extra refinances are “backing up” our mortgage processing times.
With higher mortgage volume coming in the door, a lender has 2 options – either have current staff work 20 hour days to mitigate the slippage in service levels and Mortgage Processing turn times, or hire more people (either new hires for the company, or contract workers, usually underwriters or processors). Either approach has the same problem – new hires need to learn on the go, and sometimes THAT’s a bumpy ride, and even seasoned contract workers need to learn the mortgage lenders processes, software and unique operations.
Recently, one of our first time home buyer purchase loans needed to close in 3 weeks (only way borrower could get her offer accepted). We have a new assistant working with our processor, and we didn’t know how this was going to work, we just knew that it HAD TO close on time.
That anxiety quickly turned to gratitude as she hit the ground running, excelled in communications, and made what could have been a stressful process for everyone involved a smooth ride to the closing table. 3 weeks on the job, she had 30+ files to work on, and she nailed it.
“I tipped my cap, gave her a standing ovation, and applauded until she made a curtain call.”
Another loan needed a rush a few days ago. A FHA streamline, which had to close by the end of the month to avoid interest being charged to the borrower for the entire month of April (have I mentioned before that HUD has a REALLY unique way of calculating interest for a refinance??). As we approached the deadline, we involved our operations team, gave them a heads up that closing/auditing would be seeing this file last-minute and it required immediate attention.
We also asked our processing manager to rush what would normally be a 3 day part of the loan process through in less than 24 hours. We completed the closing instructions, and the loan funded when it needed to.
I wish I could say the “rush” stopped with these 2, but we have 29 other files on-going that are operating on an ASAP closing date. Yes, we have loans that are not closing until May – and we have loans in process for June and July…. but with an especially tight first time home buyer market, where inventory shortages and “bidding wars” are forcing offers of 30 day closes or less… nearly everything requires a “Mortgage Processing Rush” to get things done on the schedule everyone else needs to keep.
So what’s the point? Well, there are two. For one, we want to publicly acknowledge the amazing operations team that is working behind the scenes that bust their butts so that our clients don’t see too much of an increase in Mortgage Processing Times this Spring.
The higher than normal mortgage processing turn times have not led to a slip in service despite how crazy things really are. Our team has been AMAZING, from applications to processing to underwriting to closing. We are doing some pretty unique things to keep this train on the tracts, including creating a “hot sheet” that gets updated every morning with the Rushes and URGENTLY needs help files within the Company system.
The second point is to shed some light on how operations work for a mortgage company… especially when we have low mortgage rates, and a “Sellers Market.”
We DO understand that your loan needs a rush.
We DO think your loan is incredibly important.
We DO want you to feel like you’re our only client.
So what can you do to HELP when we are in this kind of Mortgage Processing Time Crunch?
GET US WHAT WE ASK FOR… PRONTO!
- Don’t make the mistake many first time home buyers do and plan a closing date that must happen over a “Holiday” Weekend. Everybody else on the planet is trying to close that Friday too!
- If someone from our office calls and says we need… (fill in the blank) – please know that we are NOT trying to “beat you up.” We are TRYING to get your loan through the mortgage process as quickly as possible. Yes, a lot of the time what an underwriter is asking for doesn’t make sense, to you and me. Right now, we are ALL better off just giving them what they want. If you can’t get it, let us know right away. Help us problem solve. Maybe you can’t get “X” but you could get “Y”?
- We have borrowers that get documents that need to be signed, and they wait a week to send them to us. Well, we can’t order your tax transcripts until we have your signed documents back! Getting those transcripts right now, when the IRS is backed up takes DAYS (and if you are part of a LLC or have K1’s, it can take a week or more). PLEASE GIVE US DOCUMENTS BACK!!!
- Transfer any balances from one credit or bank account to another – we know that especially around holidays banks start offering to transfer your credit card balance for a lower rate… please, please wait until after closing to do this.
- Don’t wait until closing to pay for a Home Inspection if you are getting a USDA Home Loan
- Make large deposits ($200 or more) that can not be sourced. We MUST document ALL of the money going in and out of your account
- Pay off any charge-off accounts or collections
- Take out furniture loans
- Close any credit cards or Consolidate credit debt
- Max out your credit cards, remember that we will be pulling another credit report 2 or 3 days prior to CLOSING
So what are you waiting on? Go ahead and get pre-qualified, just remember there are some things you can do to make mortgage processing times easier for ALL of us!
If you are considering a new home purchase, and you are looking at mortgage processing times… give us a call and see if we can meet your expectations. It does us no good to tell you we can do something we can’t. We are going to be realistic. Can we close a loan in 2 weeks? Maybe. Call Steve and Eleanor Thorne, 919-649-5058. We can help you though this mortgage processing times issue… and we have great mortgage loan rates!