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This past week, a study was published that ranked some of the largest lenders based upon their loan denial ratios. The study rated lenders based upon the number of purchase loan applicants that were rejected by the bank. Chase was at the top of the list. Over 33% of the applicants at Chase were denied. Wow! Over 25% of applicants were denied by Bank of America, and roughly 20% were rejected by Wells Fargo.
What this study shows is that not all lenders are equal. A lot of people think that all lenders underwrite according to the same standards. This is simply not the case. Most underwriting standards are determined by Fannie Mae and Freddie Mac. These are the two biggest lenders in the country. While the majority of loans end up with Fannie and Freddie, some banks underwrite above and beyond required standards. Each bank is able to determine their underwriting requirements, and this reason, not all banks will do all loans.
To me, the study also shows that the employee at the bank might now be the best person to work with a home loan. I once applied for an Equity Loan at Bank of America. I was told that I was already approved, and would just need to fill out a quick application. The rate was too good to ignore. My application was taken at the branch, and then I waited. And waited. And waited. I finally called after waiting some 45 days. I was put through to someone in a call center. Typical call center that sounded like it was in India. When I asked about my loan, they told me I was denied. When I asked why, they said they could not tell me, and that I would receive a letter. The letter came a week later with no explanation. Nobody at my local Bank of America branch seemed to know that I was denied.
One of the banks that we work with is Flagstar. Flagstar rejected only 13% of home loan applicants and was nearly at the bottom of the list. Some of the lenders we work with are easier than Flagstar for certain loan types! The simple truth is that a borrower needs options in today’s market.
We are here to help provide our borrower’s with the options that insure their success. Buying a home is stressful.  Timelines need to be met. Our expertise is placing our borrowers at the right bank to insure success. And when you call Dave Financial, you speak with our staff – not a call center in India!

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