First let’s talk about the What & Whys of a loan application and towards the
last we’ll tell you about the How To. This way you’ll have a much better
chance of a loan approval. The video is more about HOW to document all the
many aspects of your situation to Federal guidelines & to an underwriter’s
satisfaction rather than just How to fill in the blanks on the application itself.
When we begin your loan process we have all the pieces to the puzzle, but the pieces can be confusing & don’t tell your story very well.
What we want to do is to put those pieces in the proper order & come out with a masterpiece so that the Underwriter will see
this
Not this!
So as you can see, the Loan Officer’s main job is one of Presentation. It is up to us to find all the missing pieces to your puzzle & assemble them into a Masterpiece.
To help us do our job of giving you the best chance of a loan approval we do things slightly different than the other guys. This has given us a turndown rate of less than 1% over the last 20 years whereas Big Banks turn down approximately 60% of all applicants and real mortgage companies turn down around 25%. Let me give you an example that you wouldn’t think would make a difference, but it makes a HUGE difference!
We no longer do totally online loan applications. In this day & age that almost seems
like blasphemy, but there is a method to our madness.
As I said we try to do things in a manner that will lead to more loan approvals even at the expense of doing what’s easiest for us. We are willing to do the extra work that is needed to ensure you have the best chance of a loan approval.
So what’s the big deal with an online loan application - it’s easy and convenient, right?!?
“Regulators have imposed higher standards on online lending... These Higher Standards have come about because almost all mortgage fraud has come about on online loan applications.”
Sean Becketti, Chief Economist, Freddie Mac,
So because of the fraud potential all online loan applicants are scrutinized much more closely than those who make an application the traditional way or any way that has a human involved. Based upon what we’ve seen, with an online loan app you are 60% more likely to be turned down for your loan & if you are approved you are likely to have 4-5 times more conditions. And then there’s the fact you’ll go through a more in-depth & rigorous processing which will have you pulling your hair out & is really what leads to the 60% greater chance you’ll be turned down.
This means if you make an online loan application you already have 2 strikes against you because you not only have to prove you are who you say you are BUT you also have to contend with the Fraud Sword of Damocles hanging over your head. Which means your odds of getting your loan approved just dropped significantly. It also means that if you are approved you will have significantly more loan conditions than if you’d made a traditional loan application. So an online loan application is the last thing you’d prefer to do.
We were one of the earliest adopters of online loan application software because it’s the simplest and easiest way for a Lender to get all the information in a loan application. But since we’ve seen the turn down figures we’ve scaled it way back, and while there’s a lot you can still do online, we want you to be approved so we do things in the manner that guarantees more loan approvals. It’s a lot more work for us, but since a loan approval is the desired goal we feel it’s the only way to go.
HERE IS WHY AN ONLINE LOAN APP CREATES THOSE PROBLEMS?
Every online loan application system takes your initial, & probably incomplete, loan application and runs it through the computerized automated underwriting systems before it sends your data back to the lender - AND THAT’S BAD!
Most lenders aren’t aware of this, but because of all the tomfoolery that many Buyers tried during the recent recession the AUS (Automated Underwriting Systems) were changed to include a “memory”, or historical footprint as they call it, of the initial way your information was entered into the system and any subsequent changes made over the life of processing.
Any change in the data has the potential to cause your file to be flagged for “possible fraud” and require more careful scrutiny of all your data and consequently require much more documentation which will give you a more complicated loan process and a higher chance of a turndown.
Too many or the wrong changes can also cause your loan to be flagged for Quality Control procedures AFTER approval which can delay your closing.
But it gets worse because it can also cause you & your loan to be flagged for quality control measures & investigated by the FBI after closing. Nope, an online loan app is not the way you’d like to go!
As representatives of Fannie Mae & Freddie Mac explained the history footprint to us, they used the seemingly positive example of a loan officer discovering $30,000 in a retirement account that the Buyer hadn’t entered or had entered incorrectly. Being good loan officers we said we would promptly enter or correct the data on the application. More money seems like a positive, right? More money means you have a stronger loan application, right?
WRONG, because now your loan would be automatically flagged for further scrutiny because the system wants to know all about this money that suddenly appeared. It thinks “Possible Fraud”.
So how bad is this? For the past several years just about half our loan applicants had already been turned down by at least one other lender before they came to us (in 2017 loan turndowns nationwide were up a whopping 60%), but because when an applicant goes to a new lender it starts a whole new file within the system, most of the time we can get an approval simply by re-entering your information correctly without all the changes and history footprint the other lender was locked into.
This means the poor processing skills by the first lender or the fact that you filled out an online application is what caused the initial turndown. So if you’ve been turned down, don’t give up, it might have been the Lender’s fault.
Because you don’t understand the importance of the information you are entering into the system this means you can innocently enter your data incorrectly or leave something out so that it has to be added or changed later. This means that quite innocently you could be flagged for possible fraud and turned down for your loan. This is why we made a video to educate you as to exactly how to fill out a loan application, the importance of each line item, and showed you ways you can strengthen your loan application.
To improve your odds of a loan approval we do your loan application in 2 stages.
The first stage is what we call the pencil copy. Your original application is held in abeyance and not entered into any federal database until we have talked to you and are sure we have the best possible interpretation and documentation of your life’s story. It is a lot more work on our end, but our job is to give your loan the best chance of being approved, not to make things easier on us.
The video takes you through the loan application process step by step and shows you WHAT information is needed, WHY it’s needed and HOW you can improve your odds of a simple & easy approval.
In the video we educate you as to Why certain questions are asked & Why certain information is required. We’ll talk about the most appropriate way to answer, explain your many options, give you insight into the rules & laws plus tell you what documentation you’ll need to support your information so that you will know enough to volunteer information we might never know to ask.
Does it work? YOUBETCHA!!
About 50% of all the mortgages we close have already been turned down by at least one other Lender and yet in 2016, 2017 & 2018 we had only one turn down all year. ONE!!
As a way of comparison most lenders only approve about half of their loan applicants. We normally can get people the same loan, the same down payment, the same interest rate (or lower) and the same terms as the loan they’ve been turned down for which tells me they shouldn’t have been turned down in the first place. And the common element to all these people is that they did a totally online loan application and the stricter qualifying guidelines of the other lender plus extra scrutiny caused them to be turned down.
AN ONLINE MORTGAGE APPLICATION MAKES IT MORE
LIKELY YOU’LL BE TURNED DOWN FOR YOUR LOAN!
For optimum security purposes the secondary market says
there needs to be some kind of physical contact.
Now watch the video about making a loan application. It will take you longer to view this video than it would to fill out the loan application, but you’ll learn enough to help us do the best job possible for you and you’ll feel much more comfortable about your odds for loan approval and so you’ll sleep better at night.
As you’ll come to understand a properly filled out loan application is crucial as it’s the roadmap an underwriter will follow so we want to lead the underwriter towards a loan approval, not take her down the path to a loan turndown.
After you’ve watched the video you’ll be able to help us find all the important missing pieces to your puzzle that will help us write a Pulitzer Prize winning short story about you. Because that’s what your loan application is - a story about you!
Enough of the mixed metaphors already!
This video is a step-by-step tutorial & training film all rolled into one. It will give you information that you'd never get without having decades of experience as a Lender. So download the loan application and supporting documentation, grab a pencil and get ready to take the first step towards home ownership.
I’d suggest that all loan applicants (eg. husband & wife) look at the video together and pause whenever you need to stop & gather paperwork or documentation. This way everyone will understand exactly what’s needed & why, plus nothing is left out or forgotten.
When you finish you'll have all kinds of insider information and understand the WHYs behind the laws and questions we ask. This will ensure you the greatest chance of a fast & easy loan approval.
This video will help ensure all the work you put into finding your new home wasn’t just an exercise in futility!
You'll probably want to Bookmark this page!
Download these pages &
follow along with the video below:
Occasionally we seem to have an intermittent problem embedding a YouTube video so if the video isn’t embedded use this link.
http://www.youtube.com/watch?v=1sQ6Jc2WbwA
OR enter your data electronically.
This does not trigger the “online loan application” so it won’t affect your approvability.
Do whichever way works best for you.
https://blink.mortgage/app/signup/p/financiermortgagegroupince/davidbennett
Now you know enough to make a loan application that ensures you have the best chance of a loan approval and you can get the best rates & terms. If you didn’t do the online information gathering you can either fax or scan & email the paper loan application you’ve been playing with to us or arrange to meet us in person.
Rest assured that regardless of how you submit it, your data is going nowhere near the Federal underwriting engines until we are sure we have things put together in the the best possible manner.
Once you’re done then click over to Processing Your Loan to learn about the next step in process and see what has to be done before your loan can be submitted to an Underwriter and you get your final loan approval. (Remember there are 2 totally different approvals involved in a mortgage)
