No News Isn’t Necessarily Good News in Mortgage Underwriting
As Sandy and Dan Lucca of Plymouth, MA, walked through the usual steps of buying a new home, they had no idea how suddenly or unexpectedly the process could fall apart.
They’d already completed a home inspection, signed the purchase and sale (P&S) and were approved for a loan, when they received a call from their mortgage company, informing them that they wouldn’t be able to meet the closing deadline due to processing delays.
Dan and Sandy were stunned. When they first applied for a loan, the lender confirmed that their timeline wasn’t an issue. “Since then, we hadn’t heard anything from the bank, so we just assumed everything was fine,” said Dan Lucca.
When it comes to mortgage lending, no news isn’t necessarily good news. Particularly in today’s economic climate, many lenders are struggling to meet closing deadlines, but don’t readily offer up that information. When they finally do, it’s often late in the process, which can put borrowers in real jeopardy.
For Dan and Sandy, they got the call from their lender just nine days before their closing. With their existing house to be sold in the coming days and a substantial down payment on the line, they were set to lose a lot of money with no place to go.
Not knowing what to do next, they promptly told their realtor about the delay, who in turn urged them to contact Jeff Pilon, a radius loan officer.
“Unfortunately, this is not an uncommon scenario,” said Jeff Pilon. “People reasonably assume everything is fine until they’re told otherwise, which typically happens late in the game, and that’s when the fun begins.”
After just one phone call with the Luccas, Jeff and his underwriting team snapped into action. Eight days later, Dan and Sandy received a full loan commitment and closed on their new home, as originally scheduled.
“In a matter of days, Jeff was able get us back on track,” said Sandy Lucca. “He took all the stress away.”
To prevent loans from falling apart due to time delays, Jeff strongly encourages borrowers to ask lenders upfront how long it will take to get a full commitment. Then listen carefully to the answer. If the lender indicates any potential for delay, it’s best to walk away and find another company that can assure you of working within the needed time-frame.