While mortgage rates remain steady, wait times keep getting longer, specifically, the time between applying for a mortgage and closing on it. Only an optimist would count on getting a loan financed within 30 days of application. Lenders and brokers point to several explanations.
Purchase loans take precedence over mortgage refinances. When someone buys a home, the transaction often is one link in a chain of purchases and sales. Delay one closing, and suddenly there can be a domino effect on people’s lives.
Then there are priorities that have something to do with the mortgage crisis. Foreclosure prevention is the top priority for some lenders. With refinances under the Obama administration’s Making Home Affordable plan, there are priorities. A lot of lenders, including the biggest, Bank of America Home Loans, are refinancing loans without mortgage insurance first.
With other lenders, there are even different priorities for loans with mortgage insurance. If your loan has mortgage insurance, you will probably get faster help by applying for a refinance with your current servicer, even if you can apply elsewhere.
Whether you’re purchasing a home, doing a traditional refinance, or doing a streamline refinance under the Making Home Affordable plan, the process is likely to go slower because lenders are pulling back from automation.
In the years leading up to the mortgage boom, a lot of loans passed through automated underwriting systems. If the computer approved the application, the processor checked to see if all the paperwork was in the file. Manual underwriting, however, is now back and with a vengeance.
That explains why a borrower might be asked to submit updated paystubs a few weeks after supplying paystubs at application. And then there are ‘letters of explanation’ where borrowers must explain why he or she applied for credit anywhere else within the past 90 days of application date.
A group of properties originally intended for beachfront condominiums and other commercial projects in Rocky Point,