DENVER (CBS4) – Before buying a home, many people want to make sure their finances are in order, so they ask their lender for pre-approval. Sometimes that pre-approval does not turn into a closed loan, leaving the home buyer in a lurch.
CBS4 Consumer Investigator Jodi Brooks found one Denver mortgage company that’s started a so-called “Trauma Center” in an effort to save these loans.
Fairway Mortgage lenders say they hear from frantic realtors all the time, sometimes just days from a closing date, with a mortgage in jeopardy. The problem is that the lender that pre-approved the loan now can’t get it approved.
Erin and Mark Willer were just such clients. They were moving to Denver and had pre-approval to buy a home.
“We were the ideal borrowers for any investor or any mortgage company,” Mark Willer told CBS4.
They had good credit and low debt. They were set to sign on to a FHA, 30-year, fixed interest rate mortgage for the home of their dreams.
“We got a call kinda at the 11th hour from our lender saying she wasn’t going to be able to make it happen, so that kind of threw us into shock,” Mark explained.
“It was really upsetting. It was probably one of the most stressful things I’ve had to go through,” Erin Willer added.
“It’s 100-percent wrong that the consumer and the real estate community thinks sometimes you get pre-approved but you don’t get the loan… then I don’t think you were ever approved,” said Dave Gallegoes, owner of Fairway Mortgage.
Gallegoes sees it time and again. Lenders offering pre-approvalwithout taking a thorough look at the buyers financial picture. His company has become expert at closing loans that other companies deny.
“We have to do a thorough analysis of the profile, so it’s we thoroughly analyze income, assets, employment and credit…tax returns, we see is tehre a way to do this. Did they miss something?” Gallegoes added.
In the Willer’s case, Fairway Mortgage broadened out the financial picture to include assets like 401k’s and other investments. The couple was approved for their original loan program, the FHA, 30-year, fixed interest rate.
Gallegoes advises that home buyers need to make sure their lenders are doing a thorough check on their financial picture before pre-approving them for a mortgage. The lender should be asking for:
- pay stubs
- W-2 forms
- bank statments
- tax returns
The lender should also be able to tell you your credit score and what you qualify for. If a lender doesn’t do any of that, you should not consider yourself approved for a loan.
- Written for the Web by CBS4 Special Projects Producer Libby Smith