Rapid Response Group At Gustan Cho Associates

This BLOG On Rapid Response Group At Gustan Cho Associates Was UPDATED On October 28th, 2018

Over 75% of borrowers at Gustan Cho Associates are folks who have either gotten a last minute mortgage denial or are going through major stress during the mortgage process .

Loan officers assigned to our rapid response group are constantly under pressure
This is because they need to meet deadline dates on borrowers who have gone through major stress from other lenders

Rapid Response Group loan officers role is similar to 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

In this article, we will discuss and cover the Rapid Response Group At Gustan Cho Associates.

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 that the loan officer did not properly qualify borrowers
Loan officers issued a pre-approval in haste without properly qualifying borrowers

Just because the borrower meets the minimum credit score requirements, has sufficient qualified income, and meets 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 by the Great Recession of 2008
Loss of business
Loss of job
Divorce
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 the past 12 months
The loan officer did not double-check their own lender overlays
The 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 the 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 the 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 the 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 Rapid Response Group

Over 75% of borrowers of The Gustan Cho Team Rapid Response Group are borrowers who have gotten a last-minute loan denial or are going through months of stress during the 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 Rapid Response Group:

We have countless of borrowers are folks who have gotten a conditional mortgage loan approval
They have provided conditions on the conditional loan approval
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
This is because their lender cannot keep the original closing date
The home buyer keeps on requesting closing extensions over and over again
Many of our borrowers are folks who were not properly qualified
They 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
This is because by retracting a credit dispute, the borrower’s 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 Rapid Response Group 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
other utmost confidential and very personal information where even family members of the borrower are 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
They 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 are why we have the Rapid Response Group at Gustan Cho Associates:

Promised and delivered!

LOAN STATUS: Closed Jan 2017

LOAN TYPE: Purchase

CLOSE ON TIME: Yes

INTEREST RATE As expected

FEES/CLOSING COSTS As expected

30 year fixed
FHA Loan
First-time home buyer
Low credit score

Got Our Loan Done In Short Time. AMAZING!!!!!!

LOAN STATUS Closed Jan 2017

LOAN TYPE FHA: Purchase

CLOSE ON TIME: Yes

INTEREST RATE As expected

FEES/CLOSING COSTS As expected

30 year fixed
FHA Loan
First-time home buyer
Low credit score

This What Happened On This Case Scenario:

The borrower was expected to close but gotten a last-minute loan denial.

The original loan officer from first lender our borrower went with the improperly qualified borrower
This was because the loan officer did fully review the borrower’s credit report
The loan officer 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
This was because they had a minimum credit score requirement of 620 FICO
Borrower gave up
Did research after the fact and saw one of my BLOGS online
Wrote me an email just to vent about his bad experience during the 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
The 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 an 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
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 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 need 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
This is why the borrower credit scores plummeted
This is 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
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