bank for scottsdale real estate mortgagesWhen I saw the heading of the article I found online I couldn't wait to click on it. I get so many buyers that have been pre-qualified by their personal bank. A few buyers received a financial benefit from using their banks, like a lower interest rate or closing cost help. But most do not. In fact, many buyers go to one of the big banks because they don't realize there are other financial options.

Even if I give them my list of fantastic mortgage brokers, they've already spoken to someone at the big bank and for some reason feel like they need to continue with that lender. One of my most recent closings was a buyer that regretted making that choice, which happened to be Wells Fargo. With that said, here is a list of the banks that reject the most mortgages (according to the Wall Street Journal Online's Market Watch):

Bank NameTotal ApplicationsRejection PercentageDenied Applications
JP Morgan Chase 80,036 33.6% 26,894
Bank of America* 76,355 25.6% 19,547
Wells Fargo* 399,911 21.2% 84,687
Quicken Loans* 25,038 17.3% 4,331
U.S. Bank* 52,425 17.2% 9,014
Citibank* 44,945 14.3% 6,442

*These banks have denied pre-approvals incorporated in the figures.

I think this chart is interesting as you can see which bank takes the most applications - Wells Fargo. But it's #3 on the list. Chase takes the top prize as the bank that turns down the most mortgage applications.

I have a list of loan officers that I have used and am happy with their services. If I have a buyer that does not have a pre-approval letter I give them my list. There isn't a bank on that list. I have had closings with the big banks, and the best one I've had to deal with is Fifth Third. However, I just had a mortgage not approved by them and one of my other lenders told me they can do it.

There is another reason not to use one of the major banking institutions for a mortgage. Even if you've been pre-qualified, closing on time is an issue with most of these banks. If you can't close on time you could lose the house you fell in love with. A seller doesn't have to give an extension to close.

I mentioned Fifth Third above and I had another issue with them. The out-of-state loan processor was questioning the flood zone designation on the house, which meant there is a minimal or no risk of flooding. But for some reason she didn't know what that national FEMA designation meant. We had to go back and forth with her. She also asked when my client (who actually worked at Fifth Third) when she was going to have her mold inspection and certification. Mold was mentioned in our real estate contract but there is no specific mold inspection/certification. My client thought I forgot something and was a little irked until I explained what that portion of the contract actually meant. After that, she felt angry at the loan processor (again).

Most of the local big banks have their mortgage processing departments in a different state. Every state, in fact, every MLS area, has different contracts. So how can a loan processor understand the meaning of each and every area's contract? Some states have items that don't come up in other states. You need a local mortgage broker with in-house loan processing that is familiar with our Arizona contracts.

Because of situations that have been mentioned, the listing agent might ask you to switch to a local lender, meaning a local mortgage broker. In a multiple offer scenario, you could be bypassed by another buyer with a similar offer just because of the bank you chose. I've seen it happen many times.

If you'd like my list of the best loan officers and mortgage brokers I have used in the 30 years I've been in the business (licensed in 1983), just give me a call at 480-877-1549 or use my Contact Form. If you're just starting to look and aren't yet ready to get pre-qualified, make your search easier by filling out our Automated Search Form.

Posted by Judy Orr on
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