What's Taking So Long With My Mortgage?

We've discussed how you can speed up the mortgage process in the last post. Now I'd like to tackle a topic that many borrowers are fustrated with constantly: What's causing the delay!

I'm assuming you've done everything in the previous post thus optimizing your loan's processing time. If you've done all that and there are still delays, then something may be wrong. But what could it be?

Good question. Ask your loan officer. Sounds simple but he may just be too busy to give you an honest answer. He may push you to the processor who then claims that only the Loan Officer can answer your question. And the wheel goes round... To get to the bottom, it's best to review the procedure for approving and funding a loan.

When he spoke with you to do the original application, you were asked questions about income and he pulled your credit and so forth. He took that information and ran it by some of his favorite lenders. The Account Executive at the lender told him whether or not they could do the loan and at what interest rate. A good Loan Officer will also check the guidelines of this bank to make sure that your situation fits their lending criteria. This is the information that the Loan Officer uses to give you a quote and Pre-Approval.

Now you've signed the documents and given him your additional documentation. Your Loan Officer sends this information to the Lender. Now, remember the application you took originally? If the documentation doesn't match the application (very often it doesn't) the Lender may give the Loan Officer a hard time. Instead of saying "We can't do the loan", they ask for additional documentation. This may include additional income or asset documents or an explanation letter from you. Sometimes it's the appraisal or title report that surprises us and causes the problem. Every piece of info the Loan Officer gives the Lender goes through a system of checks. This causes the delays.

First, you should recognize the delays early. If your Loan Officer asks for additional documents, ask why. Let him know that you are saavy by asking what reason the Lender gave for requesting these documents. The biggest delays will happen when your Loan Officer gives up on one Lender and has to switch to another, especially if they switch documentation type. A "Full-Documentation" loan requires W2's, paystubs, and the whole lot. A "Stated-Documention" loan requires much less. If the income proven by the documentation you gave is drastically different from the application, he may be forced to switch documentation types.

Just being aware of the different obstacles that a Loan Officer must overcome can give you a better understanding of what causes delays and how you can speed them up. Most often, speeding up your loan just involves getting the proper documentation in a short period of time.

If you get the feeling that your Loan Officer is too busy or won't answer your questions frankly and honestly, then you may have a much worse problem: an incompetent loan officer. This problem is easily corrected because there are so many of them out there and they're all competing for your business.