It is common knowledge when completing a loan that it will take 30 days. But does it?
As demand for loans continues to rise, large and understaffed banks are overworking and underdelivering.
Mortgage Spike Catches Up With Big Banks
According to Reuters, Bank of America is currently closing loans in an average of 41 days and Wells Fargo has been taking up to 120 days. To tackle the increased workload, they have been scrambling to hire, offering extended rate locks to customers, and allowing unlimited overtime pay to underwriters. Acknowledging public frustration, Wells Fargo Spokesman Tom Goyda says, "Wells Fargo Home Lending is working to provide a great experience for our customers and meet their expectations during this period of increased demand."
In some cases the time lapse is just too much- causing customers to lose out on their dream home. Realtor Donnie Keller of Fort Worth, Texas says he cautions his customers against taking out loans with Bank of America as his experiences have been so bad. "They have low interest rates, they get the buyers in and then they just completely destroy the deal," said Cara Campos, a realtor in Cherry Hill, New Jersey.
Though staffing has begun increasing over last year, a thriving job market and the mortgage industry's reputation for being volatile has the number of applicants decreasing while the number of staff leaving the industry increases. To eradicate this, companies like Quicken Loans have been leaning on digital remedies for these positions. This may explain their rise to the number 2 U.S. mortgage lender in just over 10 years. Digital lending has made a huge dent in closing times on new homes and refinancing. Lending Tree reports that new home closings are at 43 days down from 74 in 2017 and refinancing is on average at 46 days. All of these fluctuations have been unexpected and don't seem to be stabilizing any time soon.