Tales from the Home Loan front lines…

Stuff I’ve heard in the last few weeks about Buyers’ funding woes…

Like the mortgage broker who couldn’t get a loan through because his supervisor was putting his own business in priority in the queue while there was still USDA money for the period.

Like the agent missing closing because the lender’s warehouse has no funds.

Like the lender who has tried to take clients from the mortgage broker who submitted the application to cut the broker out of the deal.

Like the bank underwriter whose voicemail says, “Email me,” and then her email box is full.  No communication.  In this one, the file was set aside with no notice to my client, and it took a couple of days to find out why.  “Just because” may have been accurate.

And there is more.  While folks fuss about a “bailout,” the current key issue is liquidity, and the willingness and ability of banks to lend funds.  If they have the funds.

And, there are funds out there for qualified Buyers.  My money man tells us this week he is finished with “prequal letters” since they are nearly worthless.  “Pre-approvals” will finally be the norm, backed by pay stubs, employment confirmation, and credit pull with a credit score check.  For an antsy Seller who is concerned about a Buyer’s ability to perform on an offer, that level of due diligence is more important now than ever.  A contract termination is now a red flag to many skittish Buyers.

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