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Tuesday, July 25, 2017

I recently closed a new home purchase loan for a first time home buyer that made me very proud. He wasn’t a regular first time home buyer, and he wasn’t a regular client. This applicant was actually a senior lending officer at a small regional bank (to be left unnamed). He was referred to me by a friend as he was trying to research area lenders that would be “less rigorous and more competitive than his own bank.” He admitted that he was hesitant about going to another lender, when his bank offered “the same products and programs” but knowing the “ins and outs” – he knew that “he would get a better deal elsewhere.” And he did. When I asked him what was concerning him about his bank, he said it came down to the process, the underwriting and the appraisers they use.

Processing & Controls

The application and loan process will undoubtingly vary from company to company. This is true of any product, and with any service. When it comes to the processing of a mortgage application, there is a very wide range of difference from one mortgage originator to the next. While I am biased with this aspect, I believe that mortgage bankers are in the best of both worlds when it comes to managing a loan experience. As a direct lender, a qualified mortgage banker has direct control over the application, processing, underwriting, closing and compliance of each loan from A-Z. Mortgage brokers do not have the same capability, and quite frankly depository banks are too big to know what one department is doing versus the other. Within 24 hours of receiving our list of documents needed, he was able to upload them to our secure online mailbox and our process began.

Underwriting

The highpoint of any mortgage is the actual loan commitment, (ie: “Getting Approved.”) There is no question that having common sense underwriters and decision makers - can help give this already complex process - a pleasant or painful conclusion. Yes, we all have guidelines that we need to adhere to, but having the flexibility to use discretion when need be, and good judgement when warranted, can be the difference between a loan approval and a loan rejection. Being able to get on the phone with a decision-maker in a mortgage company is something that is common at Approved Funding, and quite frankly helps us approve and close more loans. We issued our commitment to him within 48 hours of receiving his documentation and there were no rigid requirements or demands that were needed, other than the customary items from his attorney and title company.

Appraisals

Another area of much anguish and pain in the mortgage world is when it comes to home appraisals. New rules have been implemented to make sure that loan originators and appraisers are not in cahoots with one another when it comes to valuations. They have taken a somewhat simple appraisal process and convoluted it into an administrative nightmare causing delays and inaccuracies and most mortgage companies. As a direct lender we have systems in place to ensure we are using local, knowledgeable, experienced and competent appraisal companies - who know the area and work hard to determine proper value. It is in everyone’s best interest to get it right the first time without the heartache and frustration of having to fight appraisers and underwriters. Fortunately, Approved Funding does not experience many issues of this nature with our fully-compliant appraisal management process. Our appraiser was in contact with his Realtor within a few hours of the request. The appraisal was done without issue, in less than five business days.

Granted I am biased, but in my humble opinion, a consumer will get the best value by working with a mortgage banker like Approved Funding. Commercial or Community Banks have a nice allure as large money-center conglomerates, but their regulatory restrictions and bureaucratic processes make most mortgage experiences confusing and unpleasant. In addition, rates and terms are usually worse at these institutions than those of a competitive mortgage banker or broker. On the other hand, mortgage brokers do offer a value-added as well, but their lack of influence and controls make working with them a drawback. Mortgage Bankers offer a unique hybrid of both a commercial bank and mortgage broker where they get discounted rates for clients while controlling the entire process. Approved Funding is a perfect example of such a mindset and benefit for their clientele. Special shout out to Dovid Shayowitz – Mazal Tov!

By Shmuel Shayowitz

 Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience including licenses and certifications as certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at  Shmuel@approvedfunding.com.