Home Equity and Refinancing
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Is 3 months an unusual amount of time for a refinance to take if your broker says you are ready to close but every time you call for update you are always waiting on a fax or a paper or something else?

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2011-09-13 00:19:52
2011-09-13 00:19:52

Absolutely! If you have had your home appraised and given all of the necessary documents to your loan officer then your loan officer has seriously dropped the ball. Each loan is unique but 3 months is extreme! It is safe to say 3-5 weeks is average. I hold a Loan Officer License so you know that I am not just making these things up. In case you are unaware...here are some broad strokes to help paint the picture for you. The loan officer and the lender's underwriter are duking it out. When your Loan Officer (L.O.) completes your loan package he sends it to the selected lender's underwriting department. The underwriter's job is to find reasons not to approve the loan. This is basically to protect the lender against a bad risk. He looks at the file and determines if the borrower (you) qualifies for any of his loan programs that his company (Like Countrywide) is offering. If you do, then he makes a list of stipulations that you must meet in order for the loan to go through and close. Things like income, cash reserves and good credit etc.. There are lot's of reasons for an underwriter not to approve a loan. It sounds to me like the underwriter has seen your file and your L.O. has done a really poor job of meeting the stipulations (Stips). That is why you are always needing to send him more documents and your loan has not closed. Your L.O.'s inexperience is showing. An experienced underwriter knows which companies send him files that are accurate and complete. He will favor those and skip over ones that he knows will be incomplete and a hassle to get closed. His job is to find good loans and is sometimes paid on loans closed so speed is a factor. I would advise you to get a copy of your appraisal that is done IN YOUR NAME( Which is your legal right)and start over with another company alltogether. Your L.O. has not earned his commission.

Also beware of "Yield Spread". Example: You qualify for a 5.5% rate on your loan. Your L.O. sells you on 5.75%. The lender will pay the L.O. .25% of the loan amount for closing your loan at the higher rate. This would mean an extra $375 for the L.O. to make on a $150,000 loan amount. This really adds up for L.O.'s. Look at the settlement statement closely at closing time. Things listed as "P.O.C" are things that are "Paid Outside Closing". Yield spread is one of those things. Ask your L.O. about it. Keep in mind that his legal obligation is to Disclose info......NOT to explain it. If your guy won't then find one that will. It is worth the time and effort. Hope this is helpful. Good luck.

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