Las Vegas and Henderson Realtors are benefiting from quality, underwritten pre-approvals, not just an automated approval. Let me start by saying I've never been a big fan of the term "pre-approval." What is a pre-approval? The term suggests that it's something before the approval yet what we are giving is some degree of an approval. Hence, it is a pre-fully underwritten approval but the true purpose of the pre-approval is for the buyer to be able to make a solid offer. It would make more sense to me for it to be termed a pre-offer approval or something along those lines.
That said, I spoke with a listing agent yesterday who said that his short-sale that has been going on since the Christmas holidays and it just blew up the night before and wondered if I could save the deal. The buyer and both agents were frustrated because they had an initial approval and the buyer even told me that he had given the loan officer all of his documentation months ago so why are they just finding out now? The reason is that most loan officers take an application, relying solely on the verbal information provided by the borrower and then pull credit an run it through the automated underwriting system. The approval letters most agents get is only based on verbal information which is usually not very accurate.
A small percentage of loan officers collect documentation and perform income calculations off the pay stubs and W-2s which is better but still not good enough. The thing that killed this deal was the non-reimbursed business expenses on line 21 of Schedule A of the tax returns. I was able to do a couple of things and restructure the deal and presented to my underwriter and I think we might be able to save the deal. The important thing to understand is that if you want to minimize your surprises during the escrow process, make sure your loan officer is analyzing all of the documentation. I have also seen deals blow up for information that was on the bank statements that wasn't properly reviewed by the loan officer. Las Vegas and Henderson Realtors benefit from quality pre-offer approvals, not from automated approvals with no real analysis.
If you are a Las Vegas or Henderson agent and would like to benefit from a quality pre-offer approval, you can have your clients apply here and click on the "Yes" button for the Patriot Act information and they can complete and application on line or they can call me. Additionally, if they would like to understand more about the mortgage process, feel free to go to the Client Resource Center and click on the Free Report to download it in PDF.
Alterra Home Loans, the company I work for, is committed to providing quality pre-offer approvals by allowing the loan officers to submit files to underwriting without subject property. This way, the loan officer's work is double checked by the underwriter so we are able to issue a solid approval subject only to a fully-executed offer and acceptance, an appraisal and title. In this case, Las Vegas and Henderson Realtors benefit from a quality pre-offer approval. Please feel free to comment and talk about your experiences or what you have heard regarding this.