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Rates Hold; 70 Days to Close at Major Banks, Per WSJ Cover Story

The Wall Street Journal had a cover story today about how backed up the major banks are with mortgage business. Bank of America actually told a customer to come back in 60 to 90 days to just start the process. The average time it takes to close a transaction at a major bank is 70 days, according to the article.

There is some irony to all of this, as it was the major banks who lobbied for much of the regulation that makes it so hard to close mortgage transactions these days. Their hope was to push much of the small mortgage-bank and “broker business” out of the industry, and they were successful. A huge number of the less educated, less diligent and less skilled loan officers and brokers were pushed out of the industry.

Banks did not, however, count on two things:
(1) how hard it would be to train their own employees to comply with the new regulations; and (2) how smart the brokers and mortgage banks who remained in the business would be.
We can still easily close relatively clean purchases in under 30 days (and 21 days if necessary).

And we always close our refi’s in under 45 days. Our major hold-ups usually involve large banks: (1) for purchases involving REOs and short sales, we are often held waiting for banks to sign off on contract changes or closing statements; and (2) for refinances, we always have to wait far too long to get banks to subordinate 2nd mortgages that our borrowers want to remain in place.

Jay Voorhees
Founder/Broker | JVM Lending
(925) 855-4491 | DRE# 01524255, NMLS# 335646