Home Buying in Michigan>Question Details

Justin, Home Buyer in Michigan

How long should FHA underwriting take?

Asked by Justin, Michigan Wed Jul 8, 2009

This is the second house that we have put an offer on. The first one actually fell through because our loan was in underwriting for so long that the seller finally killed the deal. We are now in the same situation with the second home. Our realtor wrote the purchase agreement on June 1st with the closing date being before July 15, giving it 45 days to get through the approval process. Our realtor told us that was plenty of time to get it done. Well here we are just a week before the deadline and we have not heard a thing from the underwriters. The file has been with them for over three weeks now. What makes this whole situation so frustrating is that we went through the same thing with the first house and eventually lost it. How long should underwriting really take? We were told no more than a week or two. Here this is going on four weeks now and the first home it was over six. If these banks are so backed up with files then why don't they hire more people?

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You are not alone my friend. Here's what's going on. Remember when loans were given to people who could prove they could fog a mirror? Then those people defaulted. Companies shut down, people lost their jobs and the economy went down hill. As a bank, they have to keep a certain amount of profit and they're scared to death if the economy does another one of those. So, they won't hire more people. Then, the rates dropped to an all time low and the refinance boom happened. Still, they won't hire more people. They understand that eventually, the refi boom will slow down (why pay more in unemployment etc).
So, now we have to look at who has your loan. If it's a big bank (Wells Fargo, Suntrust, BOA), you may be looking at a closing of up to 60 days. The loan officer should have told the Realtor after getting the contract, "We ain't (southern slang) closing for 2 months". Why? Because the borrower wants the best rate out there. If you go with a wholesale broker/lender that's smaller, their rates are a little higher, but you close faster. It's one or the other but not both.
Your loan is not in underwriting for that amount of time. It's sitting on a desk waiting to be seen. Underwriting takes a few hours. Then, it's conditioned for pay stubs, title issues, appraisal issues etc. It then goes back to the processor to get the conditions if any. Then it goes back to the underwriter. Waits 2 days to be seen and then hopefully is clear to close (CTC). Then it goes to the closing department and waits another 2 days to be sent to the title company for closing. I use a company that closes loans in 2 weeks. Higher rate though. Sometimes, that's worth it. I'm not licensed in MI, yet.
1 vote Thank Flag Link Thu Jul 9, 2009
Hello, hope all is well.

My home loan was sent to the underwriter last Feb 5th 2013. They approved my loan in underwriting in 2 hours. Closed Feb 8th, 2013. Depends on the underwriter and how fast they work on it. I had a very strong file to begin with. I was prepared for the loan a year in advance. So make sure you have everything ready well before you even consider buying a home then your loan will be a brezze. Closed Fha loan 23 days. Hope this helps.
0 votes Thank Flag Link Sat Feb 9, 2013

Sorry to hear this is taking so long. The lender I use underwrites and funds their own loans, so the process takes about 2 weeks. What bank are you using?? Strongly consider going elsewhere, I would say.

Derek Bauer
Real Estate One
Web Reference: http://DoorToDreams.com
0 votes Thank Flag Link Thu Jul 9, 2009
good morning...if it hasn't closed in six weeks, i doubt it will close in six months....i'd be glad to help.if you have a few minutes..i have done lots of fha's....thanks....bob mcclure- success mortgage partners- plymouth, michigan...
0 votes Thank Flag Link Thu Jul 9, 2009
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