This week’s article is one that I am especially proud of. I write that opening sentence even before I have any other part of the article written as of yet. You see, the actual piece that I planned on submitting is inaccessible at the moment. The submission I did prepare, was a brilliant piece, (if I must say so myself) about the current state of the bond market and interest rate progression. It discussed how the current “inverted yield curve” has reached a critical point in the market that is finally pointing to the economic slowdown and potential recession that I have been forecasting for the past few months.
Unfortunately, however, there is construction going on in our building, and some workers accidentally sliced some electrical wiring that took down the power in half of our building. “The show must go on,” as they say – so rather than trying to recreate the statistics and analysis, I decided to take the opportunity to discuss the real-time life occurrences of what happens when things go wrong at the very last moment. So with my laptop in hand, and a blank piece of paper, I will start all over, and try to be done before they go to press. Since I began writing these articles, I have never missed a single week of writing.
The reason this article is one that I am proud of is that it takes a certain amount of patience, composure and focus on meeting a cut-off when all that you arranged is gone. In the mortgage business, there are deadlines at every step of the way. On purchase transactions, for example, there is a closing date that is often firmly set well in advance – and one that many parties are targeting to coordinate moving into or out of homes, relocations for employment and schools, as well as scheduling conflicts that have been pre-arranged and agreed upon, often months in advance. Before that, there is usually a firm “commitment contingency” period whereby a mortgage approval is required to ensure the buyers are adhering to the contract requirements and conditions.
On all mortgage applications, there are also fixed expiration dates for most of the documentation that is submitted to a lender for loan approval. Paystubs, bank statements, appraisals, credit reports, and other critical items of importance “expire” after 90-120 days on average. In some instances, updated paperwork might indicate a modification or decrease in eligibility, voiding a mortgage approval.
We recently had a situation where a client of mine was working with us on a mortgage refinance where we were consolidating three mortgages, four high balance credit cards, and two large IRS judgments. By the time we got some of the payoffs and documents we needed, others expired. Updates only proved to complicate the file even further. I decided, the only way that we were going to be able to “meet the deadline” was to force a drop-dead closing date, even though we were not approved and did not have the necessary items to qualify the client. The client, who has known me for over a decade and over ten mortgages, trusted me enough to do exactly what I prescribed.
We jumped through every hoop and met every deadline to close on our target deadline date without issue. On top of it all, the client will be saving almost two thousand dollars a month through this massive consolidation! I know that I can write a full book, and most likely a sequel, about deadlines and challenges that we had to meet because of certain circumstances that would cost our clients tens, or hundreds of thousands of dollars. Again, it takes extraordinary confidence, experience, expertise, and poise to meet those targets. If you are reading this article, it means I made the deadline… again. It’s always satisfying to meet the challenge! A special shout out and happy birthday to Zeevyah Benoff, Lenny Hanauer, Adina Kirschner, Yossi Niazoff, and Jonathan Schloss.
By Shmuel Shayowitz
Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive interest rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience including licenses and certifications as certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected]
