Jeff... good post!  Knowing the basics of a credit report and income are VERY important.  It will mean the difference between an approved loan or NOT!   

Screening the client is huge, supporting documentation and being able to decipher it is just as big.  Those two things help to ensure folks don't run into that other 'S' word... Surprises.

Jeff: I have been reading credit reports for years and understand those puppies inside out.

But I do find that my lenders differ in the way they calculate income which makes my job maddening.

YES even my FHA lenders!

I bet those clients are thrilled with you for saving those loans. Good job as always.

Jeff - Thank you for sharing David's post.  I'll have to actually read it now to see what started your post.  Good information as always.  I agree with you and think that there were too many LOs that jumped into this when the market was good.  They never took the time to actually LEARN the business because they didn't need to before.  Now more than ever, they need to know all of the details and like you said, review the loan like an underwriter before submitting it to your lender.

hhhhhmmmm.... all loan officers first... 4 out 4... 

KIM.... what's sad is that I am finding more and more clients that were told that they were qualified or approved and at the last minute, denied... and the reason was because of their credit. I had a client come to me from VA 5 months ago. He L.O. had the deal for 30 days and the day of closing said that they couldn't close them as of yet. She found me 3 days later... that Monday, I took that app. and we closed it within 5 business days. The other LO called her and was angry with her, that she went to someone else, telling her if he can't do it, nobody could.  When he called a few days later, she told him that we could close her loan. He said, no way, your credit sucks. Yes, he told her that...  gee, why was her credit okay 30 days ago?  LOL  SAD... very sad... but it didn't suck, it needed massaging. 

JASON.....   screening clients is beyond huge. And I just read your post, and yes, supporting documentation is huge. Just as I talked about in regards to the child support information and not having the documentation.

JANET.....  I can't imagine lenders being different when it comes to qualifying ways with income... it should be pretty basic and I would point this out to them. That's just my opinion.. but thanks for the compliment and for stopping by.

JOHN.....  my pleasure....  yes, read David's post... it was good, but I feel that the 2 things that I mentioned our most important and most reasons why deals die at the end. But you are right, the loan officer never took the time to learn the business and what to look at...  thanks

Jeff - You mentioned that it was 4 LOs that commented first.  I think that is a compliment and hopefully you see it that way also.  Your blogs are quite informative.  Instead of other LOs trying to bad mouth you or find you to be a threat (very much like some of Corporate America) they like to hear what you have to say... even though some have never met you before (like myself).  Don't get me wrong, sometimes I'll look into something that you say, just to get further clarification for myself.  It only confirms for me that you are professional and knowledgeable about what you do.  Anyway, thought I'd share my point of view on the 4 LOs above.

Great post as usual Jeff. I just sent a note to another FHA lender yesterday commending them because they were clearly a "govie" type lender- very detailed and very accurate.

In our business, especially in government loans, the devil lives and hides in the details. The determination if social security disability is likely to continue for three more years can make or break a loan for example. It's the experience of knowing the pitfalls (and I must admit I still see new ones constantly!) and being able to plan for them that often makes the difference between closing or not.

Gerry Suarez, Jr.

Your HUD Loan Pro!

Jeff, yet another great post.  You put alot of the details into your posts which assist me as a Realtor.  Now I know when to throw the flag!

It is amazing to me that it still happens but it does, not to my buyers but I have had problems with my listings.

Jeff,

Thanks for the post. I really can't believe that it comes down to an inability to read a credit report and a pay-stub. Perhaps there's an opportunity for continuing ed credits for the challenged.

Jeff you always amaze me with the info you provide - it all does come down to using a lender that KNOWS their product and the people they must work with... you ROCK

JOHN.....  I was just making an observation....  ;o)    I think more realtors need to read this and to understand it. Most loan officers that are going to comment, are the ones that get it.. at least in my opinion. Thanks for the follow up.

GERRY.....   detailed & accurate, not a free swinger, someone that just sticks them on the wall, hoping that they stick. There is no pride in that. That's another thing that it comes down to, taking pride in what you do.  thanks for the compliment.

TIM & PAM......  thanks, I truly appreciate those compliments. And for more red flags, read this : Mortgages & Real Estate -- Consumers need to be aware of these Red Flags !!!!!  thanks

GENE..... it's not amazing, but sad and scary. But yes, it still happens. I am not looking for perfection, but just honesty and being upfront... knowing the basics and if you don't know, then ask.

WILLIAM.....  there is only so much that you can teach. As I mentioned about, it's pride... wanting to learn and to understand... and not hoping someone else does it for you, hoping that it closes.

I haven't heard anything from my clients about their closings not happening early lately--it has been "why isn't it closing on time?"

One thing I always ask the lender before submitting a contract is "Is this a reasonable closing date for you to have all of the docs ready to go?"  I trust that answer from one professional to another...but now I'm going to add a week.  The big banks are the worst!  Sometimes I wonder whether people get moved from teller straight to loan officer with no training!

Jeff it sounds pretty simple and boils down to one factor...Is the loan officer average or great? Just like in Real Estate there are good and bad Realtors. Guess which deals have the most problems in a home sale? The ones with a crappy Realtor!!!

Yep, we have all heard those excuses! I like your blog, it gives me a good understanding of the lender's point of view.  Thanks for your blogs!

Jeff - you are a voice in the wilderness my friend!  Thanks for adding.  I felt the other post was a little light on the wrist slapping as well.  Like it or not, we as lenders do share our part in the blame.  Not ALL, but as an industry, we aren't as pure as the wind driven snow either.

Chris the implementer

I believe there is a large element of financial advisors that purposely make promises without having all the information with the mentality that they will workout the details later.  One way to avoid this is have an Approval from a Direct Lender. I encourage all buyers to maintain copies of all their documents and have a backup plan if a lending institution falls through.  I encourage all realtors to develop relationships with Lenders they can trust to review a file and provide feedback within 24 hours, so that they can look out for their buyers best interest. I encourage Brokers to have at least 1 Lender they can turn to as a backup plan.  Preparation is the key to all parties being successful.  It is a team approach that usually gets the deal done.

THESA....  thanks for those kind words and for your supportas an advid reader.

KENT....  sure, not closing at all is bad... but not closing on time???  there usually shouldn't be any excuses either.  It's preperation, communication and knowledge. That's sad if you have many that don't close on time.

BILL..... that is a major factor...  but even a good loan officer should have no problems.  Meaning, average should be able to close it....  just knowing the basics to me would be average. It's sad all thr way around, no matter how you look at things.

KATRINA....  thanks, my pleasure and I am glad that it gives another perspective. I think realtors need to read us and to understand and not just to assume because of their experience level just in real estate. ... or what their loan offcer does.  thanks

CHRIS.....  thanks for agreeing, hence why I mentioned the other post. I truly think most of what happens, happens in the first  hour of the application. If the right questions aren't asked, or it's not explained correctly, or if one can't read credit or compute income, it will fail there.... not later on, when most people use that as an excuse.

GULF ATLANTIC..... I semi disgaree with your statement, about in order to make sure that this doesn't happen, is to have an approval by the direct lender. Again, it starts with the loan officer... the person that speaks to the borrowers.  Don't you know that getting an approval, a real approval could take a week or two? Not to many loan officers get a complete file and 1003 when taking an application. But thanks for your input.

Unfortunately I've got one falling apart now that I predicted would fall apart.  The pre-approval letter was "sketchy" at best. Here we are 5 days before closing..not good.

Thanks for your post... I think we as loan officers need to understand that with chaniging times, we need to change how we do business.  Lots of lenders (Taylor Bean and Whitaker) for example allow you to run DU, and actually submit the loan to them with a TBD address, and they will underwrite.  This will allow you to TRULY preapprove your client.  If a guideline changes, the lender usually makes concessions for a few days for the loans that are in the pipleine.  We just have to stay on top of things.  If there is a guideline change with an impending deadline, then we need to communicate that to all parties involved. 

Thanks for the post...