With rates at record lows, borrower frustration is at record highs. It seemingly takes forever to get a home loan, especially a refinance.
"Underwriting turn times are absolutely awful across the board right now," says Dan Green, loan officer for Waterstone Mortgage in Cincinnati. "Many lenders are recommending 60-day (rate) locks right now, just because of volume."
"It's a tax, really. Everybody's interest rates are a little bit higher, and fees are a little bit higher, because of the inability for appraisers to get to homes quickly, for underwriters to get through files quickly. Everybody's just overworked right now."
The process is particularly brutal for homeowners who have home equity loans or home equity lines of credit. Before they can refinance, these borrowers have to persuade their equity lenders to resubordinate, or agree to keep the loan in second-banana status.
"People need to realize, if they have home equity lines of credit, that the subordination can take up to 30 days," says Dick Lepre, senior loan consultant for Residential Pacific Mortgage in San Francisco.
Because of paperwork backups and subordinations, Mortgage Master's Anastos says his company recommends locking for 75 days, "which means we're trying to close those loans in 65 days."