Home Buying in Los Angeles>Question Details

Ryan D, Home Buyer in 90026

Why is my lender withholding my pre-approval letter when I was pre-approved informally via email?

Asked by Ryan D, 90026 Thu Nov 19, 2009

I've been pre-approved by a loan officer at Chase Bank via email (informal), but went with another agent to help me find a house. The loan officer has not provided the pre-approval letter, but my agent indicated that they need the letter to start looking for a house. Why would my lender be withholding this letter from me? I'm frustrated at this point. Please advise. Thanks.

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HI Ryan,

Sorry for the frustration that you are feeling believe me you are not the only one going through bizarre scenarios. As you in indicated an informal pre-approval 3 years ago would be considered good as gold. In this market it's nothing. Most likely your lender has sent nothing because he has nothing. Unless you provided all of the financial documentation to your lender and signed a application(1003), and have gone through the application process and have received sign and returned all disclosures you have no ammunition to tackle this competitive market which is your approval letter . So what you should do is talk to a your Realtor and get a referral to a good up to date and compliant mortgage broker someone who knows what they are doing and are up on all the law and compliance changes you are waisting your time, and if the loan officer is your Realtor's referral reevaluate the professional that will be representing you the biggest purchase of your life in one of the most difficult and confusing markets. After all that if you are still frustrated call me and I will refer someone to you good luck.

1 vote Thank Flag Link Thu Nov 19, 2009
Hello Ryan,

The agent, Carol McAlister, has already told you that the pre-approval letter is "not worth the paper it is printed on." She is right if a thorough pre-approval process has not been completed by your lender verifying all of your income, assets, and credit through a FannieMae, or FreddieMac electronic underwriting system. This is known in the industry as a "D-U (Desktop Underwriting) Approval." Usually, lenders don't take the time to do this full step, they will simply type out a generic letter (something any person can do on his/her own computer), stating that you are PRE-approved, without doing the full research to know if you are for sure. I came from working at a bank, and I can tell you that the loan officer would have had to run your loan through a D-U system, to provide you with an actual approval letter. If he has not done so yet, he is either extremely lazy, or you are not actually approved yet. Either way, I suggest you go to a new lender.

What listing agents find to be the most helpful in seeing that the buyer is well-qualified to buy the home is ask to see the D-U Approval, that shows what loan conditions the homebuyer will have to provide to the lender to close the loan (of course, all personal information, such as your SSN should be blacked out on the D-U before prviding that document to the listing agent, so that listing agents do not have access to your personal information).

I know this information first-hand, because HouseTech is known for giving listing agents peace-of-mind with well-qualified homebuyers, because the homebuyers are put through the thorough pre-approval system. Showing a strong pre-approval letter along with the D-U Approval, good credit and proof of down payment will help better the home-buyer's chance at getting his/her offer accepted by listing agents/home-sellers. I suggest you make sure you are put through the same pre-approval system with your lender that you choose.

Good luck with your home-buying!


Diana Breazile
Director of Operations
HouseTech, Inc.
0 votes Thank Flag Link Mon Nov 23, 2009
Hi Ryan,
It's weak service. That's about it, you can go to other direct lenders like BofA, Wells Fargo, ect.
Ask for an underwritter approval letter it's more solid.

Best Regards,
Jes Sierra, B.Sc.
Century 21 Beachside Realtors®
Chino Hills, CA
0 votes Thank Flag Link Thu Nov 19, 2009
First of all, if you are pre-approved, you need them to e-mail or fax you a copy. Second, the pre-approval is not worth the paper it is printed on. It is based on the information you gave them. Once you give them your w-2's, paychecks and everything they require, they will verify everything and give you a pre-qualifed letter which will still have restrictions based on appraisal, no info. changing on your credit etc.
0 votes Thank Flag Link Thu Nov 19, 2009
Maybe after further reveiw the lender determined that they cannot approve you. I would contact another bank and see if you can get an approval...
0 votes Thank Flag Link Thu Nov 19, 2009
You are not required to stay with the same lender -- I'd suggest you contact another lender. I have a great one from Bank of America on my website, and I guarantee that she would be very available and cooperative. If you qualify, you shouldn't have a problem. Look on my home page, about 2/3 down. Deb is great! This is why I am very selective in picking lenders to build relationships with and work with. I don't get any referral fees or anything -- just good service for my clients. Bonnie
0 votes Thank Flag Link Thu Nov 19, 2009
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