Bradenton Florida Real Estate News

Friday, April 20, 2007

When loan approvals turn sour


Well it happened again!


This week a transaction failed to close because the buyer's loan was rejected. But wait, we had been presented a letter with the offer stating the Buyer was APPROVED for financing.


The letter was generated by the real estate agent working for the buyer. He also works as a mortgage broker.


When I inquired as to why the Buyer's loan was rejected I was told it was because the buyer has been self-employed less than 2 years. The loan program requires more than two years.


So, how is it we get to within a few days of closing, with a loan-approval letter in the file, and it is just now discovered that he's self-employed less than two years. Good grief! Wasn't that question asked during the pre-qualification questioning? Wasn't that information on the written loan application?


Did the agent/mortgage broker generate the approval letter fraudulently in order to put the deal together? Or, is he just incompetent?


It's too bad that only one who suffers is the seller, who has taken his home off the market all this time. It's too bad there are no penalties incurred by whomoever dropped the ball!


This is the nature of today's real estate market. Marginal buyers are about the only buyers out there. Desperate real estate agents and desperate mortgage brokers try to make the buyer look good in order to get the deal executed. Then they hope and pray they can get the buyer approved.


Loan pre-qualification letters and loan approval letters just aren't worth the paper they are printed on.


Thanks for letting me rant!

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