Rapid Response Group At Gustan Cho Associates
This BLOG On Rapid Response Group At The Gustan Cho Team At Gustan Cho Associates Was Written By Gustan Cho NMLS 873293
Loan officers assigned to our rapid response group are constantly under pressure because they need to meet deadline dates on borrowers who have gone through major stress from other lenders. Their role is that similar of emergency room physicians where they need to undo the damage done by other loan officers and lenders and calm everyone from not just our borrowers but sellers as well, realtors from both buyers side and sellers side, attorneys from both sides, and others involved in the real estate transactions.
Mortgage Process & Importance Of Pre-Approval
The Mortgage Pre-Approval stage is the most important step of the mortgage process. The main and only reason why borrowers stress over the mortgage process and/or get a last minute mortgage loan denial is because the loan officer did not properly qualify the borrower and issued a pre-approval in haste without properly qualifying borrowers. Just because the borrower meets the minimum credit score requirements, has the sufficient qualified income, and meets the general mortgage loan program guidelines does not mean that the borrower is pre-approved.
Reason Why Borrowers Go Through Stress During Mortgage Process
There is no reason why a borrower who has a solid pre-approval should not close. Fact is that any borrower with no late payments, credit scores over 740 FICO, no collections, no charge offs, no bankruptcies, no foreclosures, and low debt to income ratio should have no problem qualifying for a mortgage. However, that is not how the perfect world is.
Many folks, including myself, have gone through financial and personal hardship such as the following:
- Became affected with the Great Recession of 2008.
- Loss of business.
- Loss of job.
- Health issues.
- Death and/or medical issues where it affected household income.
- Have outstanding collection accounts.
- Have outstanding charge offs.
- Have judgments and/or tax liens.
- Have bankruptcies, foreclosure, deed in lieu of foreclosures, short sales.
- Have low credit scores.
- Have late payments after bankruptcy and/or foreclosure.
- Have credit disputes on credit report.
- Have late payments in past 12 months.
- Loan officer did not double check their own lender overlays. Borrower may qualify for a mortgage but may not qualify with the specific lender the loan officer works for due to their overlays.
- Did not get approve/eligible per AUS because did not run Automated Underwriting System.
- Did not properly qualify borrower with qualified income and did not get second opinion and counted part-time income, overtime income, bonus income, and/or declining income.
- Have not check recent mortgage lending guidelines.
- Did not go over credit report with borrower. Credit reports are not always accurate and key questions such as having outstanding judgments, tax liens, or other public records will get flagged during third party search during mortgage process.
All of the above are important factors in the qualification process of any borrower and the borrowers are dependent on their loan officers to honor their pre-approval letter and not just close on their home loan, but close their home loan on time.
Borrowers Of The Gustan Cho Team
Over 75% of borrowers of The Gustan Cho Team At Gustan Cho Associates are borrowers who have gotten a last minute loan denial or are going through months of stress during mortgage process. I cannot tell you the number of borrowers who contact me as a last resort because they have gotten denied by not just one or two lenders but multiple mortgage lenders. Here are typical borrowers of Gustan Cho Associates:
- We have countless of borrowers are folks who have gotten a conditional mortgage loan approval and have provided their lender conditions on the conditional loan approval and the underwriter keeps on creating new conditions over and over again.
- Many borrowers are on the verge of losing their earnest money on their home purchase because their lender cannot keep the original closing date and the home buyer keeps on requesting closing extensions over and over again.
- Many of our borrowers are folks who were not properly qualified and were issued a pre-approval letter by their original loan officer and during the loan process, they are being asked for credit disputes to get retracted.
- Retracting a credit dispute can be devastating because by retracting a credit dispute, the borrowers credit scores can drop significantly. ( PLEASE READ THIS BLOG ON CREDIT DISPUTES DURING MORTGAGE PROCESS ).
- We have so many borrowers who have gotten a mortgage approval and gotten a denial after mortgage approval .
The Gustan Cho Team Mission About Borrowers
Here is our mission statement:
- Our borrowers are giving us the faith, confidence, trust, and depending on us in not just closing their home loans but closing their mortgage loan on time.
- We as loan officers are not selling a product. A home purchase is most people’s single largest investment in their life.
- Our borrowers are giving us the most confidential and personal information about themselves. Tax returns, W2s, bank statements, divorce decree, bankruptcy paperwork, child support paperwork, public records, detailed letters of explanations, investment accounts, credit scores, credit reports, financial and personal statements, pension and social security award letters, and other utmost confidential and very personal information where even family members of the borrower is not privy to.
- Besides the borrowers, sellers, real estate agents, attorneys, families of borrowers and home sellers, and others are depending on us.
- We as loan officers need to be available to our borrowers 7 days/week, weekends, holidays, and late evenings.
- The borrower is always right. There are no two sides of the story.
- Do not tell borrowers what they want to hear, but the FACTS of the matter at hand.
- Open communication is key. If you do not know the answer, tell your borrowers that you do not but will get them the answers.
- The Rapid Response Group at Gustan Cho Associates was created and launched to help borrowers who have been through a stressful mortgage loan process and need our help and depend on us.
- Every member of the Rapid Response Group at The Gustan Cho Team needs to believe and live by our mission statement of the importance of the amount of trust, faith, confidence, and belief our borrowers are giving us and letting down a borrower is NEVER AN OPTION.
- Some members of our Rapid Response Group of The Gustan Cho Team had prior credit issues and do understand the mortgage process and that if there is a will, there is a way.
- We are here to help and educate our borrowers and there are no days off when it comes to answering borrowers phone calls, text messages, or emails.
- All of our borrowers have our cell and home numbers in the event if they need to get a hold of us.
Case Scenario Of Recent Borrower
The creation and role of The Rapid Response Group at Gustan Cho Associates is to help borrowers who are in distress due to a last minute loan denial and/or stress during the mortgage process. As stated earlier, most of our borrowers get referred to us and/or find us on the internet as their last hope and resort. The best way to explain how our Rapid Response Group works is by showing you a recent case scenario where a borrower contacted me, not to have him help him and his family get a mortgage loan, but just to vent to me after reading one of my articles.
Here is the case scenario where our borrower wrote a review and Testimonial on Zillow and we are extremely grateful for reviews by our borrowers. They are priceless. The reason I am sharing one of our borrower reviews is to explain the case scenario not to give up and that case scenarios like these is why we have The Rapid Response Group at Gustan Cho Associates:
Promised and delivered!
We contacted Gustan Cho after having an issue with our first lender. We were scheduled to close on December 30, 2016. On December 29, 2016, I got a call from our first lender that they would not be able to finance our loan because of a drop in our credit scores. This drop was partly because of two disputes that were on our credit report and discovered very late in the process. I began researching disputes and found an article written by Gus about how disputes should be taken off before pre-approval. I contacted Gus to share our story with him. Within minutes, he emailed me back and wanted to talk. He promised me that we could get the loan done and close very quickly. He told me exactly what needed to be done and raised our scores back immediately. I was very skeptical, especially after our first experience! Gus promised it would get done and he delivered. We closed on our house on January 19! Don’t give up, contact Gus and see if he can help your situation. Thank you Gus for believing in us and getting our loan done!!!!
LOAN STATUS: Closed Jan 2017
LOAN TYPE: Purchase
CLOSE ON TIME: Yes
INTEREST RATE As expected
FEES/CLOSING COSTS As expected
Got Our Loan Done In Short Time. AMAZING!!!!!!
Gustan Cho of Gustan Cho Associates was fantastic! We had a very bad experience with our initial lender and were actually told we could not get financing one day before closing. On December 29, 2016 we were told by our loan officer of our original lender that they could not finance us. We reached out to Gustan Cho and The Gustan Cho Team on December 30, 2016. They told us exactly what to do and closed our loan on January 19, 2017. Gus was fantastic throughout the whole process! He was readily available to answer all questions and answered phone calls right up to the last minute before funds were transferred over at closing. I highly recommend Gus! Thank you so much for getting the JOB done and when the other guys could not.
LOAN STATUS Closed Jan 2017
LOAN TYPE FHA: Purchase
CLOSE ON TIME: Yes
INTEREST RATE As expected
FEES/CLOSING COSTS As expected
This What Happened On This Case Scenario:
- Borrower was expected to close but gotten a last minute loan denial.
- Original loan officer from first lender our borrower went with improperly qualified borrower because the loan officer did fully review the borrower’s credit report and did not flag the two credit disputes that were on the credit report.
- Borrowers cannot have credit disputes on non-medical collections during mortgage process.
- Underwriter made a mistake and issued a conditional loan approval with credit disputes.
- Quality Control of the lender caught the credit disputes and the loan was put under suspense until borrower retracted credit dispute.
- Borrower credit scores were 630 FICO went it went into underwriting.
- After the borrower retracted the credit dispute, the borrower credit scores plummeted to 550 FICO.
- Mortgage Underwriter at the first lender issued borrower a mortgage loan denial because they had minimum credit score requirement of 620 FICO.
- Borrower gave up, did research after the fact and saw one of my BLOGS online and wrote me an email just to vent about his bad experience during mortgage process.
- I responded to borrower back and asked if he can give me a few minutes of his time so I can see if there is anything that I can do for him and his family.
- Borrower was expected to close on December 30, 2016.
- Got a mortgage loan denial.
- Borrower and I spoke and I found a solution to get this loan done.
Solutions On Above Case Scenario
This loan case scenario with this borrower was a doable deal and I told the borrower if he can give us a shot, that I think we can make this work. This is what we did and the loan closed three weeks later:
- To qualify for a FHA Loan with a 3.5% down payment, FHA Guidelines on Credit Scores require a minimum of 580 FICO.
- Our borrower had a 550 FICO.
- We were 30 points short to qualify this borrower PLUS we had hostile real estate agents and a seller who was not too happy.
- All of this was not the fault of our borrower and I am not trying to throw the first lender and loan officer under the BUS, but due to their lack of due diligence and not properly qualifying our borrower, this mess happened.
- I consulted Our Rapid Response Group and assigned this file to a loan officer.
- The assigned loan officer and I reviewed the credit report of the borrower and noticed that the borrower had two recent medical collections with outstanding balances.
- The loan officer and I found a solution to make this work.
- Credit Disputes: If you have a credit dispute on your credit report, the credit bureaus will take that derogatory credit factor from the credit FICO SCORING MODEL so if you dispute a derogatory item like a collection account, that collection account is deleted off the scoring factor and your credit scores will jump so this is the reason why lenders do not allow credit disputes during the mortgage process.
- All credit disputes needs to be retracted by loan officers prior to the issuance of a pre-approval.
- The original loan officer did not have our borrower retract the non medical collection derogatory off their credit report and this is why the borrower credit scores plummeted because once the credit dispute is retracted, the derogatory credit item is back into the credit FICO scoring model.
- This is why the borrower’s credit scores went from 630 FICO to 550 FICO.
- GOOD NEWS: MEDICAL COLLECTION DISPUTES ARE EXEMPT FROM THE CREDIT DISPUTE RULES.
- As mentioned earlier, our borrower had two medical collection items.
- I instructed our borrower on a Friday to immediately dispute the two medical collections.
- On Monday, our borrower notified me that his credit scores jumped to a 587 FICO.
- We were now ready for business.
- I notified Mike Gracz and handed him the ball to take it to the finish line.
- Michael Gracz realized the importance of a FAST CLOSING and how everyone, especially the sellers gave up but were willing to give us one last chance.
- The loan officer was on top of this file from day one.
- Got a clear to close and we closed on this loan on January 19, 2017.