Well I have some questions now that I've gone through part of the process.
Is there a new standard where basically all you can get is a pre-qualification? Chase, gave me a pre-qual letter labelled "pre-approval" (under assurances) that left me shaking my head, and the CU won't take it further unless I have a executed purchase agreement... which of course I don't have. The gave me a "pre-approval" letter but haven't verified any documentation as of yet; maybe I'm being too simplistic, in my worldview there's stated assets / income / employment, and then there's documententation supporting that which has been verified by someone as legit. First would be prequal, second would be pre-approval, if I'm wrong on any of this please set me straight.
Is this just a move by the industry as a whole? Is nobody doing what I consider to be an actual pre-approval anymore as a cost savings measure? Did I miss a step, was I supposed to pony up the application fee before this when I was under the impression that was for full underwriting?
How long does it take to look through a couple of W2's, financial statements, W2's and tax returns and stated employment history?
Edit: ah screw it, I know it was a pre-qual letter, no sense posting it. Banks apparently all fine till you actually need something, then it goes sideways.
Had another thought.
Since any random person can throw together a "pre-approval" and God only knows what they did to validiate it, is the only real information on the entire letter simply the contact name of the banker on the assumption the listing agent / seller will contact them to verify the information presented?
@Revelate wrote:Had another thought.
Since any random person can throw together a "pre-approval" and God only knows what they did to validiate it, is the only real information on the entire letter simply the contact name of the banker on the assumption the listing agent / seller will contact them to verify the information presented?
Technically, that would be a pre-qualification letter. A bona fide pre-approval should only be issued once every piece of document has been verified. Personally, I don't issue anything in writing unless it is a fully validated pre-approval. A pre-qual letter may as well be toilet paper 
.
@Revelate wrote:Well I have some questions now that I've gone through part of the process.
Is there a new standard where basically all you can get is a pre-qualification? Chase, gave me a pre-qual letter labelled "pre-approval" (under assurances) that left me shaking my head, and the CU won't take it further unless I have a executed purchase agreement... which of course I don't have. The gave me a "pre-approval" letter but haven't verified any documentation as of yet; maybe I'm being too simplistic, in my worldview there's stated assets / income / employment, and then there's documententation supporting that which has been verified by someone as legit. First would be prequal, second would be pre-approval, if I'm wrong on any of this please set me straight.
Is this just a move by the industry as a whole? Is nobody doing what I consider to be an actual pre-approval anymore as a cost savings measure? Did I miss a step, was I supposed to pony up the application fee before this when I was under the impression that was for full underwriting?
How long does it take to look through a couple of W2's, financial statements, W2's and tax returns and stated employment history?
Edit: ah screw it, I know it was a pre-qual letter, no sense posting it. Banks apparently all fine till you actually need something, then it goes sideways.
I can't speak for how other lenders operate, but I know if I issued a "pre-approval" to everyone that applied, I would end up burning more time and money than if I had validated everything in the first place. "You make $300k/year with no debt or write-offs? Great, let's get into contract and hope everything works out." 
@Anonymous wrote:
@Revelate wrote:Well I have some questions now that I've gone through part of the process.
Is there a new standard where basically all you can get is a pre-qualification? Chase, gave me a pre-qual letter labelled "pre-approval" (under assurances) that left me shaking my head, and the CU won't take it further unless I have a executed purchase agreement... which of course I don't have. The gave me a "pre-approval" letter but haven't verified any documentation as of yet; maybe I'm being too simplistic, in my worldview there's stated assets / income / employment, and then there's documententation supporting that which has been verified by someone as legit. First would be prequal, second would be pre-approval, if I'm wrong on any of this please set me straight.
Is this just a move by the industry as a whole? Is nobody doing what I consider to be an actual pre-approval anymore as a cost savings measure? Did I miss a step, was I supposed to pony up the application fee before this when I was under the impression that was for full underwriting?
How long does it take to look through a couple of W2's, financial statements, W2's and tax returns and stated employment history?
Edit: ah screw it, I know it was a pre-qual letter, no sense posting it. Banks apparently all fine till you actually need something, then it goes sideways.
I can't speak for how other lenders operate, but I know if I issued a "pre-approval" to everyone that applied, I would end up burning more time and money than if I had validated everything in the first place. "You make $300k/year with no debt or write-offs? Great, let's get into contract and hope everything works out."
Question for you and the other lenders, how much time do you typically spend with a client?
I may well be an outlier in this process, I know pretty much what I want, tell me what you need, I'll get it to you, and I don't expect nor want a ton of care and feeding... if I know your FE/BE ratio and rate sheet, I don't need a lot of additional information frankly and I'm very open both about my credit report, my scores, and what will undoubtedly require a LOE regarding my employment last year. The Chase LO has spent maybe an hour, possibly an hour and 15 at the outside on me on a loan which assuming I take it to term, they stand to make slightly north of 50K (on the assumption of roughly .5% profit).
When we really get down to it, how much of this really can be verified without contacting the employer (or the payroll processor), the banks and other asset repositories, and the IRS for the tax transcripts (good luck with that currently)? Is it in fact still a pre-qual because I'm the one turning over all this information rather than their verifying it from the reference sources? I had assumed the reference sources was in fact underwriting.
Does the term pre-qual vs. pre-approval really not mean crap until you go through UW anyway since the terminology is apparently horredously loose and that's just with a sample size of two? How disparate is it over the 1000 or so mortgage lenders?
I may have a huge misunderstanding in this process, like Saturn sized.
@Anonymous wrote:
@Revelate wrote:Had another thought.
Since any random person can throw together a "pre-approval" and God only knows what they did to validiate it, is the only real information on the entire letter simply the contact name of the banker on the assumption the listing agent / seller will contact them to verify the information presented?
Technically, that would be a pre-qualification letter. A bona fide pre-approval should only be issued once every piece of document has been verified. Personally, I don't issue anything in writing unless it is a fully validated pre-approval. A pre-qual letter may as well be toilet paper
^^^This. The lenders I use get the documentation up front. Although thinking about your personality Revelate - I bet you could sell ice in Alaska and the LO's just plain believed you!
I'm not surprised about Chase - because their good LOs are going by the wayside from what I have seen. They are going in the same direction as Wells Fargo and most of the big box banks. They would rather not pay for a well trained LO so they are using nooby's. This is one of the reasons why I usually say stay away from the big box banks. When you are going for jumbo's though, Chase has a good product and so you were right to at least apply there.
@StartingOver10 wrote:
@Anonymous wrote:
@Revelate wrote:Had another thought.
Since any random person can throw together a "pre-approval" and God only knows what they did to validiate it, is the only real information on the entire letter simply the contact name of the banker on the assumption the listing agent / seller will contact them to verify the information presented?
Technically, that would be a pre-qualification letter. A bona fide pre-approval should only be issued once every piece of document has been verified. Personally, I don't issue anything in writing unless it is a fully validated pre-approval. A pre-qual letter may as well be toilet paper
^^^This. The lenders I use get the documentation up front. Although thinking about your personality Revelate - I bet you could sell ice in Alaska and the LO's just plain believed you!
I'm not surprised about Chase - because their good LOs are going by the wayside from what I have seen. They are going in the same direction as Wells Fargo and most of the big box banks. They would rather not pay for a well trained LO so they are using nooby's. This is one of the reasons why I usually say stay away from the big box banks. When you are going for jumbo's though, Chase has a good product and so you were right to at least apply there.
Well I talked to Shane a bit over a couple of emails and he stated flatly that the big box banks had jumbo's cornered... I'm cheered by the local CU's having such competitive rates but being the old Lockheed CU based here I suppose that's not that surprising: there's money in them deposititory accounts.
Talked to a buddy of mine and he suggested that conventional mortgages were being pushed down the stack to the smaller players (like my employer) via warehouse lines and all of the regulatory headache of government-backed mortgages was essentially being dumped on the smaller lenders and they kept the profitable, unregulated jumbo space for themselves. Makes sense, to be fair, ain't nobody going to be crying if I get taken advantage of and default on a mortgage except me.
Not really sure, I'm sorely tempted to just wrap my arms around the CU at this point (though I'm getting the impression I have to apply again for a higher pre-qual/approval/whatever it is and so far the 7 minutes I've spent interacting with their LO, haven't gotten their BE ratio to just backend into the darned thing... though the pulls cost me nothing right now so why not?) though I've realized it's better to get a purchase agreement then go rate shopping apparently. Right or wrong (and I may well be wrong in this) I'm feeling like Chase half-assed it, but admittedly it may just be my misexpectations but I'm having a hard time shaking it.
End result of all this I may well wind up in the growing legions of folks that eschew major banks for anything serious (read as: more important than a credit card). I know it's been mortgage milling for a while but it's such a crap shoot with what you get. The only problem where I'd like to live is jumbo is the only game in town. Meh, maybe time to pack up and move back to Texas, or have a frank phone call with the CU tomorrow: tell me how to best use your system, and we'll just go do this... at least their letter says pre-approval on it 
@Anonymous wrote:
@Revelate wrote:Had another thought.
Since any random person can throw together a "pre-approval" and God only knows what they did to validiate it, is the only real information on the entire letter simply the contact name of the banker on the assumption the listing agent / seller will contact them to verify the information presented?
Technically, that would be a pre-qualification letter. A bona fide pre-approval should only be issued once every piece of document has been verified. Personally, I don't issue anything in writing unless it is a fully validated pre-approval. A pre-qual letter may as well be toilet paper
Admittedly this is just you and may not apply to anyone else; however, what do you go through on a pre-approval for verification purposes, and is it before or after the application fee?
Many thanks!