Establishing expectations with the loan officer. 

Do you realize that in the State of Minnesota, it's more difficult to obtain a cosmetology license than it is a mortgage originator license!  In my (Paul's) professional opinion, we have a glut of loan officers in the market.  Certainly there are decent mortgage companies where the loan officer stays on top of the file and provides excellent customer service, however there are far too many who simply don't have a clue.  Add to this already saturated equation, a multi-media circus of advertising and you have the possibility for one very confused consumer and a  potentially disastrous transaction.
Whether you're on the seller's side or the buyer's of the transaction, the loan officers performance effects both sides.  It is well within your fiduciary responsibility to your client for you to communicate with the loan officer to better ensure a smooth transaction.  Not quite sure what to ask or what it all means?  The introductory dialog and questions that follow should assist you in your discussions.
RED FLAG:  If the loan officer becomes defensive or abrasive, you should ask yourself: "WHY?"  You both share a common goal of successfully completing the transaction within the terms of the purchase agreement.  You're not questioning their abilities, you're simply learning their process as well as communicating and establishing the expectations defined in the purchase agreement.  If their initial tenor is that of defensiveness or resistance, what's it going to be like when there is a 'situation' with the file?
Listing Agents Introductory dialog with the buyers loan officer 
  "Hello ______,  this is ______ with Edina Realty, I’m the listing agent for the property at______, with the buyers ______ .  As you may have heard, the buyers have written an offer on this property.  This offer is subject to loan approval, and the buyers have indicated that you are their loan officer.  Is that correct?    

(LO's name), during the negotiations of the purchase agreement, the sellers (and buyers) have requested that I personally have a dialog with you with respect to your loan approval process.  I have just a few questions that should take just a couple of minutes.  Also none of these questions pertain to sensitive financial information about the buyers.  Most of the questions are procedural, and given the fact you and I have never worked together before, my sellers felt it necessary that I give you a call.  I'm sure you can understand their position."
   
Buyer Agents Introductory dialog with an LO the buyer brought into the transaction.
  "Hello ______,  this is ______ with Edina Realty, I’m working with the  ______ (buyers name).  I understand that you have met with the ______ (buyers) and will be working to provide financing for their purchase.    ______ (LO's name) given that you and I have never had the opportunity to work together, and that I'll be representing the buyers in the transaction, I thought it would be helpful for you and I to have a discussion prior to the purchase agreement. 

Do you have just a couple of minutes to cover some procedural questions? By the way, none of these questions pertain to sensitive financial information about the buyers."
   

LOAN OFFICER QUESTIONS
"For this transaction, are you functioning as a mortgage banker or a mortgage broker?"

"If you are a broker, are there time constraints that could affect our closing date?"

"Are you using a local appraiser?      What is their time frame?"

"Do you have a working relationship with this appraiser?"

"Does your appraiser have a supra key?"

"Has the appraisal and title work been paid for and ordered?"

"Is the buyer applying for more than one mortgage?"

"Did the buyer receive a written good faith estimate on both the first and

     the second mortgage?"

"When will the funds be released?"

"Do you table fund or can the funds be wired?"

"How far in advance does the closer receive the package and the funds?"

     Be sure to call title company to check out the mortgage company:

"Are you familiar with ‘Box 2’ on the financing addendum?"
"As part of the negotiated purchase agreement between the buyer and the seller, the buyer will be requesting that you, the lender, provide a written condition of the underwritten approval by a specific date.  Are you aware of this date?  Is this date reasonable for you to complete the underwriting process?"
"Do you have automated underwriting or does this file need to go
     through a full underwriting process?"
     Are there any concerns with the automated underwriting process?

"Are there fees associated with the underwriting process?  If so, how

     does that factor into the loan officer’s decision to submit the file?"

"Has this file been underwritten?"

"If fully underwritten, what are the closing stipulations?"  (NOTE: The buyer should have approval subject to conditions in writing.  The lender is not required to give the “stip sheet” to an agent, however they are required to give it to the buyer if the buyer asks for it.)

     What’s this “Stip Sheet” and why should I care?

     Approval Conditions: What’s normal and what should I watch out for?

     What is “Clear to Close”?

"Do you review the Final Hud-1 Settlement Statement before closing and
     what other checkpoints do you have to ensure a successful closing?"

"Do you, the loan officer, attend the closing?"
Nicci Brown & Your Team at Edina Realty Mortgage
 

A DVD of Nicci's insights into these questions is also available!

See Nicci to obtain your copy.   Click here for the DVD's table of contents.
Additional Resources
 
The September 19, 2005 Broker Update form MAR had an article on some of the questionable mortgage loan procedures Click here to view that Article  (Adobe PDF Format)