Top 10 Loan Officer Mistakes

  1. Not communicating with both Realtors for regular status updates. Not reply to Realtors. Keep them in the dark.
  2. When no Realtors are involved, not giving title company Seller’s contact information – title must search them for liens; Get payoffs; Get names, marital status; Get documentation (Wills, Appt of Executor, Affidavit of Descent, Court Order, BK papers, payoff evidence, clear title…all time intensive)
  3. Not know how closings with absentee parties work. POA approved by underwriters, Remote closing versus a true Mail-Away (POA is preferred)
  4. Not understanding property taxes for pro-rations AND for escrow calculation.  Call us, we’ll help you!
  5. Poor, incomplete or late / last-minute communication with title company, buyers/sellers, other realtors. Not telling title company in advance about:
    A buyer/seller who must be absent from closing – coordinating a remote close is time consuming but easily done with enough time;
    a) Need for a POA – seller POA is much easier, but a borrower POA must be approved by the lender in advance.
    b) That the seller is deceased or an estate or trust is involved. There is NO way for title co. to know that a seller has died. All we see in our title search is their name on the deed when they bought the subject property. This fact could result in a multi-week delay if a seller died without a will, or if the will does not give the specific power to sell real estate to the executor, etc.
    c) That the buyer/seller just changed marital status. Affects deed language, AND who must attend closing. In KY all spouses MUST either attend closing for purchase/refinance EVEN if they are not on the deed of the house…(except for a cash purchase – in this case only one buyer is needed even if married.) OR in rare cases we can have a non-title-holding spouse sign a release of marital rights.
    d) Ugly divorce situation: As long as they are still legally married at time of closing, both selling spouses must sign all sale documents – we will smoothly accommodate them at different times/rooms if needed.
    e) Short-sale; Bank-owned; Relocation company
    f) Using their nicknames on your title order instead of LEGAL names WITH middle initials of any buyer/seller AND every single one of the spouses.
    g) Not giving the Realtors/Buyers/Sellers clear directions to the closing location.
  6. Not communicating with Realtor on scheduling the closing: The lender drives the bus for date of closing, not the Realtor, meaning a loan cannot close until the lender issues final approval for a buyer. So, when an eager Realtor “sets” a closing date and tells the clients so, half the time this is simply setting all up for failure, upsetting your buyer/seller adding to unhappiness that is avoidable and unnecessary.
  7. Setting unrealistic expectations for their clients. Tell them there WILL be bumps in the road, they will be overcome! Tell this to both the Borrowers/Realtors need to be prepared to deal with them without getting too upset when they occur. Loan approval requires verification of all facets of a borrower’s credit worthiness, sometimes in seemingly excruciating, redundant detail. Tell them they will be asked early, often, redundantly, inconveniently and even at the last minute for info.  Their speed and accuracy of response if KEY to closing on time.
  8. Putting off bad news to anyone, mainly to their clients. The only thing that is worse than bad news, is bad news later. Review their options immediately.
  9. Making mountains out of molehills. The sign of a true professional is one who can keep a deal together by smoothing things out and finding compromise. One who knows how to guide their clients, and be firm with the clients when they need to be, is priceless. Buying/Selling a home is tremendously emotional, and, without guidance, buyers/sellers unchecked emotions can kill a deal faster than two shakes of a lamb’s tail.
  10. Not understanding CD prep and loan doc process – Closing Instructions come first; Then CD is prepared,

Know what time-zone your CD-approving closers/processors are in and take that into account for scheduling closing. Fast-track by contacting your manager to get higher priority in the approval cue.