Why Mortgage Applicants are Getting Terrible Customer Service

System overload

Unfortunately, what is left is the trivia. So the entire mortgage processing system is bogged down in chasing irrelevant trivia. I’m going to give you some examples.

The Patriot Act requires that we get government issued identity papers, usually a driver’s license. It’s not like we are concerned about terrorists buying homes, OK? It’s just a rule that was initially started to keep drug dealers and the like from putting money in the banks under funny names. Someone said that it ought to apply to borrowers too, hence the procedure.

So a recent borrower’s license had on it his old address from 3 years ago. When you move, you tell the DMV but they don’t issue you a new license. The underwriter wanted an “explanation” letter on the address and I needed to get a property profile on that property to assure the lenders he didn’t still own it. Finally, his license expired last Saturday so we had to get a copy of the temporary license he got when he got his new one.

The new Good Faith Estimate, GFE, has very specific dates on the form. Not only that, there is no place on the form for the borrower to sign so that I can prove that I have it to him. That doesn’t really make much difference because the lender who is going to fund the loan also has to send him a GFE as well. To prove he got it, some lenders have a new form that basically says, “I got the GFE and I wish to proceed.”

Note that one requirement – when it comes time to lock in, if the APR on the loan is more than 1/8th percent UP or DOWN, it triggers a re-disclosure and a waiting period. The dates are, again, very important. I can assure you that somewhere, sometime, some lender is going to have to buy back a perfectly good loan because some of the dates were “inconsistent with the regulations” and the presumption is that the borrower was defrauded because disclosures were improperly prepared. Totally absurd! The list goes on and on and the costs go up and up.

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As a parting shot, consider this question to ask lenders: every loan they funded was a good loan. If it was a good loan, why did you make it so difficult to get?

In a future article I want also to discuss “investor overlays” and the declining employee competence, two factors that make originating a loan no fun anymore.

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