It has been very frustrating dealing with buyers and lenders lately. I get the feeling we are heading back to 2004 when lenders were giving out loans to any human who was breathing. Competition in the lending industry is heating up. In an effort to make a living some lenders are prequalifying buyers who have marginal buying ability, hoping they can push them through the loan process system. This only hurts the buyer who thinks they are getting a loan and the seller who thinks their home has been sold.
Of course it's not always the lenders fault. We have the buyer who thinks that no one will find out that they haven't paid any taxes for 2 years and the buyer who failed to tell the whole truth to the lender, thinking they would never find out. Duh!
We need a change in the way buyers are prequalified. No prequalification or preapproval should be given until after a more thorough check of the buyers finances.
If you are going to get yourself prequalified for a loan, get a referral from your Realtor. They know the best lenders. They work with them all the time.
They get nothing back in return other than the satisfaction of knowing that the deal will more than likely close.
This is our opinion, but remember we deal with this every single day.
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