Lender Headaches that you have experienced?

Question

What has been the most common things lenders have done that has caused the biggest headaches? Solutions?

Mindy Jensen · Answer

Not asking for all the docs at the beginning of the transaction. I am asked for XYZ, I provide XYZ. Then I am asked for ABC, I provide ABC. Then I am asked for CDE and I provide CDE. A couple of weeks go by and now I need MNO. My finances really aren't that complicated. If you ask for everything at the outset, I'll send it all.

Anthony Wick · Answer

@Mitchell Chingay

Probably not common, but one of my lenders “forgot” to pay the property taxes that were in escrow. I owned the duplex about 2-3 months when I received a letter from the County that my duplex would go up for auction if property taxes not paid within two weeks.

I now use a local lender, and do not escrow taxes or insurance on my rentals.

Mitchell Chingay · Answer

@Zach Griffin that is a very helpful solution thank you for that!

@Cassi Justiz that's a very unfortunate situation I can definitely see how that could have broken a lot of trust. Definitely will keep in mind to make sure accurate numbers stay the same. I pride my self in transparency on all fees. Communication definitely is key thank you for sharing!

@Eric Mayer definitely unfortunate hope It got resolved.

@Alyssa Dyer Thank you for sharing that story. I would definitely be very frustrated if things all of sudden were changed underneath me and affected me. That usually happens when the lenders dont really have the best interest of the client. Selfish motives unfortunately when doing the right thing is always the right thing and it pays in the long run. I pride my self on being able to be the person that people would want to use over and over and feel secure referring to friends. Thank you for sharing!

@Mindy Jensen Yes it's very ineffective and waste of time when all the docs needed isn't asked upfront. I cant agree with you enough. Thank you for sharing definitely will keep that in mind in the future to minimize that from happening as much as possible.

@Anthony Wick that definitely is a rare occurence havent heard of that happening myself.

Alyssa Dyer · Answer

@Melvin List oh trust me we did not. Thankfully our buyer knew how experienced we were, had full trust and followed our lead. Although he was new he understood what it opened him up too and pushed back alongside us! We got the deal done, but with a lot of wasted time that wouldn't have been necessary with a more experienced investor-focused lender.

Melvin List · Answer

@Eric Mayer that should have been cleared with a simple letter of explanation if any!

@Alyssa Dyer Never have the loan officer forward the inspection report.  This can cause tons of issues as you know.

Alyssa Dyer · Answer

@Mitchell Chingay lenders asking for copies of the inspection report after repairs have already been negotiated putting my buyer in a position to have lender obligated repairs that they had no leverage to negotiate for.

Also, a hiccup happening and it took weeks for lending to bounce back. The buyer is then stuck with rate lock extension fees that aren't their fault.

You avoid by using a lender that investors love and have used over and over again. People that aren't going to throw curveballs or drag their feet when it matters! I'd say 75% of the investors I know use the same lender.

Eric Mayer · Answer

Just before closing, underwriter not believing my wife and I would live in a 4-plex when we tried to fha house-hack. That was the most annoying and what got me interested in owner financing.

Cassi Justiz · Answer

Communication is a huge one. Not letting agents/clients know what is happening with the file. Solution: Regular updates. Let all parties know when significant things happen. (Docs requested from buyer, Appraisal has been ordered, appraisal is back, loan is submitted to underwriting, underwriting has approved, etc)

Also, be up front about rates/fees. And double check your numbers. I know lenders can't always quote things exactly, and that's understandable. On my first investment properties (my husband and I were buying two at the same time), the lender quoted fantastic rates that the other lenders couldn't touch.  Once we were well under contract and the rate lock-in date rolled around, the rate magically "jumped" up by about a point and a half from what our original quotes were. The lender had "accidentally" been quoting us owner occupant rates all along. It may have legitimately been an accident, but I felt really deceptive especially considering that we weren't in a position to switch lenders that far into the process.

Zach Griffin · Answer

Based on my limited experience, it's not communicating clearly where they are in their process. Solution - email the investor periodically to let them know where their file stands, what is left to be completed, and an ETA for having the loan ready to fund.

Lender Headaches that you have experienced?

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