Mortgage Blog

We do have loans will fail. Here are the scenarios:

1)The value is a problem. Then if the borrower
can not pay down or does not like PMI, then the
loan will fail.

2)Condo has letigation, or the community not completed,
or Condo has owner occupancy ratio too low.

3)Some lenders does not like to do the loans for
condo rentals, or high-balance condos. If we submitted the
loans to those lenders, the loan will fail.

4)Most lenders will not like gift money in refi.
If your relative gave you some money on the statements,
the lender will not get you loan, even for repayment of
the loans.

5)Slow response to the loan agents' requests for the
documents. I had one borrower gave me signed loan documents
15 days after I locked the rate, I managed to save that loan
in the end of 2010. But failed this time because the expiration
of the rates. And there is another case, that the borrower
was unwilling to provide some documents, like tax returns, assets
documents, etc. A few loans failed that way.

But still the failed loans are only small percentage
of my portofolio. I am glad that I closed more than
one dozen loans from Provident Funding this week.
I would like to thank those clients getting me the
required documents within 24 hours. And we did save
a few loans because of the vacation delay, etc.

If we can co-operate well in the future, the fall-out
ratio will be even much less, and my ratio is already
very low in the industry.