So you are buying a home or refinancing your current mortgage and all the news about Countrywide is making you wonder if the lender who is processing your loan application or has already approved it will be in business by the end of escrow.  What can be done to make you more comfortable and ensure that you will get your loan closed?

This is a dilemma that is facing almost every file that is currently in processing… notice I said almost. 

This lender crisis is effecting most lenders and banks but not all of them.  If you are waiting for your closing and need some reassurance there are a few things you can do, some more simple than others.

Simple:

1. Check the company out online.  Look up the lender you are getting a loan with and see how their stock is performing.  Look for the news from outside brokers.  See if they look like they are performing or if an analyst has rated them down recently.  You can check any major financial site… Yahoo! Finance is a great resource with news from all major sources.  Just do a symbol look up and type in the lender name et voila!
2. Ask your Mortgage Broker if they have heard any grumblings through the grapevine.  If they have a good rep, they have good dirt.

More complicated:

1. Are you working with a Mortgage Broker or directly with a lender?  If you’re working with a lender, then you need to check above and look up their news.  If you find out they seem to be having trouble, then you might want to open a dialog with your realtor to make sure you can get an extension form ready in case you need it.  You can also call your friendly, neighborhood mortgage broker and find out what they can do to help you. Make sure to bring your loan documents from the lender with you…especially your Good Faith Estimate and Truth in Lending.
2. If you are working with a Mortgage Broker already, then ask them for a copy of the approval.  Your approval will help satisfy a pesky seller that you CAN close with someone else if something does not turn out right for you.  Also, ask the broker if they have a back up lender ready for you.  If there is a second best alternative, they can always submit a second file to that lender especially if that lender seems to be more apt to survive this market correction.

There is really no reason to believe that if your loan is full documentation with high credit and for an amount under $417,000 that you will have trouble because conforming loans are always easier to close and there are more options with different lenders so you will at least be able to find someone else to do the loan for you. 

If you have less than perfect credit, an unusual loan, a past bankruptsy or anything else that makes you more challenging to a lender then having a backup plan might be in your best interest.

Remember… this is when working with a Mortgage Broker is extremely advantageous.  A good Mortgage Broker will already be planning where to take your loan if something doesn’t work out with your first lender.  Your broker has already researched your loan with all of their lenders anyway so going back to his/her notes for a different option should be fairly stress-free.

Do your research and give a call today… you’ll be glad you did.