Rain City Guide

I guarantee you’re going to get this mortgage, I think.

Russ on 12 2, 2005

Why does the mortgage business seem so insane and unreliable? Well, there are a couple of reasons. One reason is there are a tremendous number of loan officers who came into the business during the boom of 2001 and have not had enough experience. A loan officer’s job is to make your loan work. When they look at a loan application, they examine all possible reasons that could be a problem. These are things like properties under construction, borrowers who are out of work, too much debt, not enough income, complex income situations, low credit scores, title problems, and much more. Loan officers with lots of experience have seen so many different situations with such complex problems, they know how to evaluate a new loan and spot potential problems. The next hurdle is with the underwriters. These folks work for the lenders and they review all of the information sent to them from the loan officer. They have guidelines and matrices which tell them what’s acceptable and what’s not. Underwriters will ask, or “condition”, for certain things to satisfy the lenders or the investor’s requirements. These could be things like a letter from you explaining your situation, copies of cancelled rent checks, proof of self employment, disability award letters, bankruptcy discharge paperwork and a whole slew of other things.

If any of the underwriter’s conditions cannot be met, your loan officer will try to find a way around the condition. Instead of cancelled checks, he/she might use the front of the checks and 6 consecutive bank statements showing the checks had been cashed. On Orcas Island, there are houses which were built without any permits due to a unique building law there. Borrowers sometimes quit their job or get fired days before their loan is supposed to fund. The underwriter will call your employer to verify your employment. If you aren’t working but your loan application says you are, that’s trouble. Loan officers hope to evaluate your situation and to predict the underwriting conditions closely enough to guarantee your loan. The problem is, each lender underwrites a different way. Each loan has its own weird nuances. I have one client who didn’t even know he was in a bankruptcy!

When a loan officer tells a borrower he/she can do their loan, what they really mean is “I think”. What he/she would like to tell you is this…”Every loan has problems. Yours is probably no exception. I’ll work hard to make your loan work but there’s always a chance the underwriter will come up with some condition which will stop us. If your appraisal passes the lender’s review and your title report is clean, that’s good. If your income, assets, employment and credit are all in good shape, that’s good too. If all the planets line up precisely at 2:23pm on the day you are supposed to sign your loan documents, that might help too. But, until the lender pushes the big red button with the word “fund” on it, all I can say is “I’m pretty sure I can do this for you”. That’s all anyone can tell you. This is one business where there are no absolutes or guarantees.

Russ Shulman can be reached at Trusted Home Mortgage, Inc., (206) 364-1915 or russ@wearetrusted.com.

About the Author: Russ Shulman

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Russ is the owner and designated broker of Trusted Home Mortgage located in Seattle.