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Why does everything close late

Why is it so routine for lenders/underwriters to pay no attention whatsoever to the closing date in the documents they review. It seems to me that by agreeing to make a loan on the sale of a property they are agreeing to the terms of sale.....all the terms......not just the money they are going to squueze out of the new owner whenever they get around to actually funding the loan. I am sure if the lenders had a penalty for not closing on time 99% of all loans would close on time. 
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November 19 2010 - US
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the lender is not a party to your contract. The fact the you agreed to produce (fill in a dollar amount here) at a closing by a specified date does not bind the lender to YOUR agreement. That said, the lender will do what they can to get things done asap, because they don't start getting PAID until you close, right? What incentive is there for the lender to stall?
Beyond the commitment, other items still remain: title searches etc.
By the way: we do pay attention to the dates in your contract and frequently move buyers ahead of refi's because of settlement dates.
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November 20 2010
it's a 2 way street.

I'll receive a contract from someone who has applied with me. I look at it and closing date is in 2 weeks. I tell client that I can't make that date and give them the opportunity to find a different LO or lender who can devote the next two weeks to only their loan.

Client likes me, my rates, whatever and says they want to continure with me so I let them know a realistic date and we move forward.

Two weeks later I'm getting flamed by the agents because I'm not meeting their absurd date. They're telling me "we" agreed to the absurd date, I in turn have to point out that my signature is nowhere on the contract and then refer them back to the buyer who agreed with me to a realistic date.

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November 19 2010
Everything Doesn't close late. It primarily depends on how well the Loan Officer packages the loan file, prior to submission. The quality of the Loan Processor. Knowing the Banks Operations and turn-times. The Borrower's Responsiveness in satisfying Conditions. Along with Everything that was previously mentioned.

Happy funding, Rudi
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November 19 2010
bsfreeburg,

I don't agree that everything closes late, but you do have a valid point.  I can think of a few reasons why delays will likely always be part of the process:

1)  Real estate finance transactions are complex and involve a lot of moving parts.  Things evolve, change and are uncovered during the process.  Addressing some of these items takes unforeseen amounts of time.
2)  Interest rates and demand for them varies with the financial markets.  Staffing operations on this basis is very difficult.
3)  At the present, regulations and requirements are stringent and can introduce new obtacles into a previously designed workflow.  This can happen at the customer, lender, or even closing agent level, for example.

It can be a jungle out there, but a good loan officer will help to properly set expectations and insure a timely close.  I know I am striving to do that all the time.  I don't want delays for my clients either.

Thank you.
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November 19 2010
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I think everyone goes into a transaction with best intentions but sometimes crap happens. The appraiser could get the wrong phone number of the listing agent. the appraiser gets the wrong order and does a drive by when aan interior is needed. The set up people key something in wrong by accident then they have to go back and forth with the LO to sort it out. The LO didnt realize that the borrower had unriembursed employee expenses so now the uw needs the tax returns to review.

Those are only a few of the little things that happen behind the scenes and correcting takes time. Your loan file gets "put aside" until the correct information is recieved and then back your file goes into the queue. But while your loan was off to the side 10 more jump the line so now you have to wait. but now its the 25th and even though you are not closing until next month, every file that is closing on the 30th or 31st needs attention.


So the best thing you can possibly do is gather every document your LO askes for up front and make sure you give it to them and keep copies in case they ever get lost. Further, anytime someone requests a document or letter of explaination, get it to them ASAP.

It would be great if things always worked out and as standard as the mortgage guidelines are, every file is unique and every underwriter has different interpretations of these guidelines. I could go on all day and Im sure others have more things that could make a file slow down during processing....
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November 19 2010
Too much volume, not enough trained personnel.

This industry was gutted during meltdown.   Consider all of the extra compliance, quality control that is now required on every loan, throw in the low rate environment attracting lots of refinance and purchase business.  

This is not the well-oiled machine that was churning in 2005-2007.  We wouldn't want that again?
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November 19 2010
 
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