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I have been asked a couple of times recently why it matters if you use a local lender, when everything seems to be so internet based these days. There are SO many reasons why you would want to have a local lender handle your next mortgage transaction, but here is a critical one when purchasing a home: working with a local lender may just get you the deal.
The current market here in the Triangle is the most competitive I have seen it in the 14 or so years I have been a lender here. Buyers often have to make 4 or 5 bids prior to landing a deal. This isn't just happening in the hotbed around downtown Durham or the ever popular Chapel Hill and Carrboro markets either. Just this week, buyer's agent extraordinaire Stacie Dye relayed to me that our clients' offer on a home in Butner was accepted because they were working with a reputable local lender. Yes, we have multiple offers in Butner now!
This is a story I hear OVER and OVER. Listing agents know... if you work with an internet-based lender, the chance of the deal closing on time decreases significantly. Now more than ever is the time to make sure you are partnering with a lender that can get the job done. It may just give you the edge to land the deal you want!
I get calls weekly from Realtors whose buyers are running into issues with getting loan approval. Sometimes there is a serious qualification issue, and there is no way around it. Many other times borrowers are running afoul of a large bank's internal policies, lack of communication by an internet based lender, or maybe their lender is just dropping the ball. This is not an occasional problem, rather this is a pervasive industry problem that gets exacerbated during the busy season.
This week I want to share a success story. One of my favorite Realtor Partners had a client whose loan was getting denied by a large Bank who will remain nameless. A very American bank. The client was two weeks out from closing, and frantic. We reviewed the file, determined that she did in fact meet lending guidelines (just not THIS bank's internal guidelines), and we took the application. We had an appraisal in 2 days, a final loan approval in 9 days, and will be closing in 15 days from the date of application. This type of turnaround was possible due to hardworking processing staff, a roster of local appraisers who prioritize business from our firm, and a lender who was willing to coordinate everything over the weekend.
If you cast your net wide enough, there is always a lender out there that can save you $100 in closing costs. The internet is full of attractive looking deals that entice people to click. When the rubber meets the road, and you have moving trucks and utilities lined up, and thousands of dollars invested in inspections and earnest money fees...don't you want to have total confidence that your lender can get the job done?
In my 15 years in the mortgage business, I have always worked with smaller lenders with locally based, in-house underwriting for a very good reason: accountability.
Getting a mortgage in 2018 is VERY different process than it was 10 years ago. When I started in this business, all you needed was a pulse and a Social Security number to get a loan. In one case, a former co-worker of mine accidentally did a loan for someone who JUST had the SSN (this was back in the days when loan fraud was more prevalent, and people were trying to use information for deceased persons to obtain a mortgage).
These days, everything is pored over with a fine-toothed comb to make sure the documentation meets conventional or government loan guidelines. All of the ducks must be in a row, and counted. These are the jobs of the Loan Officer, Loan Processor, and Underwriter.
With hundreds of moving parts, everyone needs to communicate effectively. When your Loan Officer is in Charlotte, their Processing Department is in Tampa, and the Underwriter works from home in Des Moines, how do you think this process works? Sometimes it works just fine, but quite often communication breaks down and someone miscounts the ducks. That is not what you want when you have movers and utilities lined up!
I am so grateful to be part of a tightly knit mortgage group. No one drops the ball, because they know they will have to look you in the eye at the next employee luncheon! We all work hard, together, to keep ourselves accountable to our clients and each other.
Isn't that what you want from the team that finances your next home?
Facing a Bidding War? Why a Local Mortgage Lender May Offer an Edge:
Link to actual article >
Home purchasers seeking to stand out in competitive housing markets should consider a mortgage professional based in the area. Don’t discount the benefits of shopping local—even for a mortgage professional.
In tight housing markets where bidding wars are common, buyers who need financing can strengthen their offers by working with a locally-based mortgage broker or loan officer, real-estate agents and lenders say. “Getting a local person helps you over certain humps—it just really does,” said Andrea Gordon, a real-estate agent at Red Oak Realty , who works in Oakland and Berkeley, California and keeps a list of trusted mortgage pros on her website.
Agents want to work with buyers whose lenders know the local market and have a record of getting deals done. That reassures the listing agent and the seller that a sale will close. In markets like San Francisco, Seattle and Boston, where buyers frequently go up against multiple offers and all-cash bids, confidence that a sale will happen can separate a winning bid from the rest.
‘In housing markets where bidding wars are common, buyers who need financing can strengthen their offers by working with a locally based mortgage loan officer.’
Online lenders can offer convenience, and it is still useful for borrowers to shop around for the best rates and terms. But lenders in hot markets caution that a small difference in rates isn’t the most decisive factor in choosing a lender. “Ability to close is even more important,” said Alber Saleh, a sales manager at Wells Fargo Private Mortgage Banking in Corte Madera, California, near San Francisco.
Reputation matters. “Finding someone you can do business with, communicate with and enjoy speaking with, is also important,” said Tim Manni, a mortgage expert with NerdWallet, a San Francisco-based personal-finance company.
Another factor is speed: Often sellers fielding multiple offers will choose the buyer who can close quickly, making it difficult for buyers who need the typical 30- to 45-day window to get a loan. Mortgage lenders in fast-paced markets are tuned to quicker closings.
Stuart Davis, a senior loan officer and branch manager at Oakland, Calif.-based Movement Mortgage, which focuses on loans in the area, said his firm aims to arrange loans in 15 to 18 days—a duration that he said is competitive with the typical 10- to 14-day closing for an all-cash deal. Mr. Saleh said that he offers a 21-day close on almost every transaction. Some lenders will also underwrite buyers—essentially offering a full credit approval, rather than just a preapproval—before the offer.
Working with a mortgage professional who has an existing relationship with a buyer’s agent also tends to mean more personal contact, and the ability to get questions answered promptly. “You can send this person a text message at 9 o’clock at night,” Mr. Manni said.
• Vet Your Cousin- “Just because your cousin does loans doesn’t mean that your cousin is a good loan officer,” Mr. Davis said. If you want to work with someone you know personally or someone from your bank, have them speak with your agent first, and reassure them of their reputation and relevant experience, Ms. Gordon said. “I’m going to try to find out—if I don’t know them—if they have the chops, basically,” she added. The buyer’s agent can then communicate their bona fides to the listing agent.
• Shop Around- You don’t have to work with the local person your agent suggests, Mr. Manni said. Compare rates and terms among local lenders.
• Home(town) Appraisal- Even if you work with a national firm, it is important to make sure the company uses local appraisers who know the difference in value between Manhattan’s Central Park West and Columbus Avenue a block away. That is especially true when a bidding war might mean the property sells for a significant premium over the asking price.
Recently, I was able to listen to a presentation by Roxanne Little with Habitat for Humanity of Durham. One of their many wonderful projects is a Habitat Home being built by the Durham Regional Association of Realtors, of which I am a member. She was asking as many of us as possible to contribute in whatever way we could to this project (which has already made tremendous headway in a short time).
Being inspired, I got to thinking about my good friend and local Realtor Steve Gardner, who donates a portion of his proceeds from every sale to a local charity. I also started thinking about the leadership in my company, Corporate Investors Mortgage Group, who sponsors more charitable events in the Triangle than I can keep track of. Being a word of mouth operation, I would be willing to bet that CIMG spends more money on charitable endeavors than it does on actual advertising. I am surrounded by local heroes, putting their money where their mouths are, giving back to their community day in and day out.
Habitat for Humanity provides such an incredible service to our community. Those that work with them, like my friend Paul Sullivan, know it is a labor of love, and one that has real, tangible results for humans in need.
As my business begins to ramp up as one of the newest additions to the CIMG team, I want to make sure that I am doing my part to give back. That is why I will be donating $50/deal for my next 20 closings to Habitat for Humanity to support this project. If you are looking to purchase or refinance in the next couple of months let's make it happen, and give back a little bit together.
Senior Loan Officer
Corporate Investors Mortgage Group, Inc.