Changing Lenders During Underwriting Process Before Closing

This Article Is About Changing Lenders During Underwriting Process Before Closing

The mortgage approval process does not have to be stressful if the borrower is properly qualified and the loan officer has set proper expectations of the mortgage process. However, if the borrower has been issued a pre-approval letter without being properly qualified, the mortgage process can be one of the most stressful processes a home buyer and/or homeowner can go through. This holds especially true if the loan officer and support team is not organized. Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders due to their lender overlays. A large percentage of our borrowers are folks who are transferring their home mortgage from a different lender to us.

• Changing Lenders During Underwriting Process is becoming more and more common
• A large percentage of our borrowers at Gustan Cho Associates are folks who are changing lenders during the underwriting process to us
• There is no reason why borrowers should get a last-minute mortgage loan denial or stress during the mortgage process
• The number one reason for last-minute mortgage loan denial or stress during the mortgage process is because the loan officer did not properly qualify borrowers

Loan officers should not issue pre-approvals without properly qualifying borrowers.

Importance Of A Solid Pre-Approval Letter

All of our pre-approvals at Gustan Cho Associates are fully qualified:

• If a loan officer is not sure about a particular agency mortgage guidelines, the loan officer will get a second opinion from a supervisor and/or a mortgage underwriter
• No loan officers are authorized to issue and sign off on borrowers pre-approvals without getting an approve/eligible per automated underwriting system (AUS)
• Loan officers can issue pre-approval letters after fully qualifying borrowers and reviewing the necessary docs and getting an approve/eligible per AUS
• Home Buyers and their families depend on our pre-approvals
• So if a loan officer issues a pre-approval within an hour, borrowers need to think twice whether or not the loan officer properly qualified the borrower
• Gustan Cho Associates close 100% of all of our pre-approved borrowers
• We just do not close on all of our pre-approved borrowers but we close them on time

Stress During Mortgage Process Can Be Avoided

As mentioned earlier, there is no reason why borrowers should stress during the mortgage process or get a mortgage loan denial:

• Many borrowers feel many things asked by their lender is extremely petty
• Borrowers need to understand that mortgage underwriters have a lot of weight on their shoulders
• Underwriters can get fired for approving and issuing a clear to close on a mortgage where the borrower does not meet agency guidelines
• Whatever the underwriter requests, it is easier to just provide it than to try to make sense of it
• There are many times where borrowers get so stressed by mortgage underwriters asking for same conditions over and over again

This should not happen.

Issue With Mortgage Underwriters Not Clearing Conditions And Issuing New Conditions Over And Over Again

Mortgage underwriters should not be asking for the same conditions over and over again:

• After providing conditions on a conditional loan approval, mortgage underwriters come back with more conditions
• There may be instances where a mortgage underwriter may have not list a condition on a prior updated conditional loan approval and issued a new condition on a new updated conditional loan approval
• However, the underwriter should not keep on issuing new conditions after new conditions over and over again
• The loan officer needs to get involved with the underwriter and/or underwriting manager in cases of the underwriter issuing new conditions after conditions
• Borrowers eventually give up or fire their current lender and look for a different lender
• Common borrower complaints are loan officers not picking up their phone calls or returning their emails timely
• Borrowers frantically search for other lenders thinking that someone else will make things easier
• The biggest reason why borrowers change lenders is because they have gotten their home mortgage denied by the mortgage underwriter

Changing lenders during the underwriter process does happen for various reasons.

Reasons Why Borrowers Change Lenders During Underwriting Process

One of the reasons why borrowers think about changing lenders during the underwriting process is due to personality differences.

• Studies prove that one of the biggest complaints against loan officers is because they do not return phone calls in a timely manner
• One of the many complaints I get from borrowers who have dealt with borrowers transferring from other lenders is that they were promised the world and loan officers/support staff were next to impossible to get a hold of
• Borrowers were cold-called constantly and once they completed their mortgage application and signed the intent to proceed, they were treated like second-hand citizens
• Every time borrowers called their loan officers it went straight to voice mail and had no calls back
• They needed to constantly call them until they picked up their phone
• Mortgage professionals should always return their borrower’s phone calls and/or emails promptly

Loan Officers should be available 7 days per week, including late evenings, weekends, and holidays.

Will Changing Lenders During Underwriting Process Cause Delays?

Why do borrowers think about changing lenders during underwriting process?

• Is it due to personality differences?
• Is it because the loan officer does not return phone calls?
• Is it because the loan processor keeps on asking for the same thing over and over again and misplaces the information?
• Is it because the loan officer keeps on changing the terms and conditions of the loan during the mortgage process?
• Is it because the loan officer has total disregard for loan commitment date and closing date and you need to request a closing extension over and over again without a loan approval?
• Is it because the mortgage underwriter keeps on asking for more conditions after conditions after submitted all of the conditions from the initial conditional mortgage loan approval?

Whatever the reason, changing lenders during underwriting process will delay mortgage loan closing no matter how much more competent new mortgage lender is.

Going About Changing Lenders During Underwriting Process

Borrowers who already decided on changing lenders during underwriting process will be changing lenders need to start the process all over.

• Need to complete a brand new mortgage loan application, 1003, and the new mortgage lender needs to run a new credit

Need to provide all mortgage loan documents such as the following:

• 2 years W-2s
• recent paycheck stubs
• 60 days bank statements
• other documents borrowers submitted to the first lender

If the first lender has ordered an FHA appraisal, the appraisal can be re-used:

• FHA Home Appraisal transfers when the new lender requests FHA Case Number transfer
• Borrowers who had a conventional appraisal done, the chances are that a new conventional appraisal need to be ordered
• Plan on having mortgage loan close 30 days from the day submitting all of the mortgage documents, and signed mortgage disclosures and signed mortgage application

It is strongly recommended borrowers stay with the original mortgage lender and close on home loan instead of having emotions upset them unless they absolutely have to transfer or get a loan denial.

Qualifying With A Direct Lender With No Overlays

Borrowers who get a last mortgage loan denial or are stressing during their mortgage process and are thinking of changing lenders, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Gustan Cho Associates is a national mortgage company licensed in multiple states with no lender overlays on government and conventional loans. The team at Gustan Cho Associates available 7 days a week, evenings, weekends, and holidays. Over 75% of our borrowers are folks who are changing lenders during underwriting process or could not qualify at other lenders due to their lender overlays. Gustan Cho Associates has zero lender overlays on government and conventional loans. We just go off the automated findings of the automated underwriting system. Gustan Cho Associates has a national reputation of being a one-stop lending shop. Not only do we offer government and conventional loan programs but we have a wide variety of non-QM mortgages for borrowers who cannot qualify on government and conventional loans. Some of our most popular alternative financing home mortgage programs are mortgage one day out of foreclosure and bankruptcy, 12-month bank statement mortgage program, non-QM Jumbo mortgages with credit scores down to 500 FIC0, mortgage with late payments in the past 12 months, and dozens of other non-QM loan programs.

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