This guide covers the mortgage timeline on manual underwriting for clear to close and closing. When the COVID-19 coronavirus outbreak hit the country in February 2020, the time it takes to close a mortgage loan changed. Alex Carlucci, a senior loan officer at Gustan Cho Associates, recalls when the COVID-19 political scare hit the United States:

The whole country was in a state of panic. The mortgage industry came to an abrupt halt. Many automated underwriting system approved files were downgraded to a manual underwrite. Lenders increased their minimum credit score requirements from a 580 to 660 overnight. Most lenders including the big banks were not accepting conventional loans without a 700 minimum credit score.

Most lenders are at capacity throughout the mortgage industry regarding new loan origination. This is a good sign for the mortgage sector but can be an obstacle for a potential home buyer. This blog will detail the new waiting expectations throughout the mortgage process. We will review the mortgage timeline on manual underwriting from the start of the application to closing and the reasons for the delay. This article will discuss and cover the mortgage timeline on manual underwriting for CTC and closing.

Changes With The Mortgage Timeline on Manual Underwriting

Numerous factors affect the mortgage timeline on manual underwriting even before COVID-19. During the pandemic, there was a long delay in the mortgage timeline on manual underwriting process. The following paragraphs will detail a few key areas slowing down the mortgage timeline on manual underwriting process.  John Strange, a senior loan officer who is an expert on FHA and VA manual underwriting files said the following:

Despite historic high-interest rates, soaring inflation, and out-of-control home prices, it is causing an extreme demand for mortgage lending. Many buyers are still able to work during these times. You mix lenders hurting and laying off operations and support personnel, you get extra demand. It normally takes 30 days to close an automated underwriting system-approved file. On manual underwrites, you can expect a 10-day longer mortgage timeline on manual underwriting.

Mortgage timeline on manual underwriting turn times due to the coronavirus political scare was the largest factor for slowing down the mortgage process. Early in the pandemic, we saw a dramatic drop in interest rates. This created a mini refinance bubble making underwriters extremely busy. Since then, we have not seen a slowdown in refinance transactions and have seen an increase in certain purchase markets nationwide. Home values nationwide are skyrocketing despite soaring rates and out-of-control inflation.

Mortgage Timeline on Manual Underwriting Is Dependent On The Home Appraisal

The appraisal process during and after the coronavirus outbreak affected the mortgage timeline on manual underwriting. The appraisal process is took longer than normal for a few factors. Early on the coronavirus outbreak, many appraisers were not working because they were uncomfortable entering a stranger’s home to complete an appraisal report. There were doing drive-by appraisals during the pandemic. However, drive-by appraisals tend to affect a property’s value. Please see our APPRAISAL DURING COVID-19 blog for more specific information on the appraisal process.

Since the pandemic has slowed down, more and more appraisers were willing to complete appraisal orders. We have seen appraisals be slowed down again throughout major cities in our country even the post pandemic era. For instance, we recently had an appraisal in Chicago that could not be completed due to protests and unrest in the community.

The COVID-19 pandemic has affected the mortgage timeline on manual underwriting and the entire mortgage lending process in general. There were buildings looted and destroyed within the area of the condo. The appraiser was not comfortable going through the crowd to complete their job. It’s been about a week, in that order is still on hold. That slows down the refinance process quite a bit. Had this been a purchase transaction, the sales contract would need to be extended. Appraisals are just one more bottleneck in the delay in the mortgage process.

Mortgage Timeline on Manual Underwriting: Working From Home

Working from home became the norm after the Democrats artificially caused the coronavirus outbreak.  We all know that most companies allow as many employees as possible to work from home during this pandemic. Dustin Dumestre, a senior loan officer who is an expert on manual underwriting on FHA and VA loans said the following:

Even huge corporations are allowing their teams to work from home. The same is true for the mortgage industry. While there have always been teams of remote underwriters, the entire operation staff works from home. This creates a lag in turn times because of the spread-out nature of documentation.

The processor can no longer walk to an underwriter‘s office and communicate face-to-face on a file. They now must communicate through email or schedule a call, slowing down the process, not to mention the distractions that come with working from home. A transition that not every employee was prepared for.

Procedure Changes By Title Companies

Title company procedures. Even during these unprecedented times, title companies must notarize and record mortgage closing documents with every county. The title companies have changed their process and allowed drive-through closings. With social distancing rules in effect, fewer individuals can be inside a title company at one time. This has created fewer time slots available for mortgage closings. Some states have eased the restrictions, while others have kept them in place. Just like every other aspect of the mortgage industry, title companies have adopted new policies to keep everybody safe.

Mortgage Timeline on Manual Underwriting Is Longer Due To Volume Of Loan Applications

The sheer volume of mortgage applications nationwide has slowed the mortgage process. Many lenders now take 45 to 60 days to close a mortgage transaction. Depending on the severity of your file, it is more important than ever to be upfront and honest with your loan officer during the application process.

Hiding any pieces of information will only come up during the underwriting process and slow down your turn time even further. In these strange times, underwriting requirements have tightened up. You and your loan officer are on the same team. Honesty will only speed up the process.

We hope this article does not stop you from buying a home. This is still an amazing time to buy. Due to the COVID-19 coronavirus outbreak, we have seen a slight decrease in property values nationwide. Then you throw on record low-interest rates, it is a great time to get home if you are in the market.

Qualifying For Mortgage With Lenders With No Overlays

We want to remind our readers that 80% of our clients have been turned down for a mortgage pre-approval in the past. Gustan Cho Associates do not have LENDER OVERLAYS on our mortgage products, allowing us to help more individuals than most banks. Even if you have been turned down in the past, please get in touch with us at Gustan Cho Associates at 262-262-8151 or text us for a faster response. Or email us at alex@gustancho.com for more information. We are here to help seven days a week!