My Mortgage May Be Delayed by a Loose Toilet

My mortgage lender would like me to explain why I pay Guadalupe every two weeks. Guadalupe cleans our apartment. They would also like an explanation for Molly. Molly occasionally babysits our children.

I am nearly clear-to-close on a mortgage w/ a large depository bank, & after spending the last month-plus on the borrower side of the underwriting process, I have a question: Uh, what exactly are we optimizing for here?

Also in today’s edition of The Scoop: sources tell me a well-regarded wholesale lender is shutting down. I’ll tell you who. Plus, brokers share their thoughts on UWM’s new Underwriting+ program, a mortgage murder podcast debuts just in time for Pumpkin Latte Season Spooky Season 👻 & much more.

A quick recap: My wife & I went under contract Aug. 21 on a new dev condo in Brooklyn. We’re borrowing $960K, putting 20% down & locked a 7/6 ARM at 5.375% with 2 points (I’ll probably pay $3,600 to make it a 10-year ARM). It’s admittedly not the world’s simplest file. I started my own business a little over a year ago, & my wife received some money from the sale of an old family vacation home.

So I expected scrutiny, & tbf, almost every condition makes sense when viewed individually. Recurring payments to our cleaner & babysitter? The underwriter wants to make sure they aren’t undisclosed debts. Yep, understood. Remember the $3.26 charge that dinged my credit earlier this year? They want a letter explaining that too. Fine. Contracts, receipts & documents — some of which I’ve already uploaded into Empower but apparently need to produce again? Annoying, but fine.

Then we got to the toilet. A fucking toilet!

Our attorney included in the contract a list of repairs/assurances the sponsor agreed to make before closing. For the most part, we’re talking about extremely minor stuff. My wife has been back to the apartment & confirmed that all the work was done. But because the repairs appear in the purchase agreement & not as a separate addendum, the bank now wants documentation showing they were completed. Receipts, invoices, proof, etc. Here’s an example from the commitment letter:

Which means a $960K mortgage may not close until October b/c the bank needs evidence that, among other things, a loose toilet is no longer loose.

Again, I totally understand the logic. The underwriter isn’t sitting there thinking, “Let’s ruin this asshole’s week over a toilet.” And obviously the condo has to be safe & habitable. The underwriter is following a process designed to make sure every possible risk is documented.

But stick w/ me here: the mortgage industry spends enormous amounts of money trying to make underwriting faster. We talk constantly about AI, automated income verification, digital assets, OCR, fewer touches & one-day approvals. And yet borrowers can still wind up in a process where a perfectly explainable payment to the babysitter generates a letter, documents already in the LOS get requested again & a minor contractual repair becomes a closing condition.

So, I humbly submit that maybe the biggest underwriting opportunity isn’t simply processing conditions faster, but getting better at deciding which conditions actually matter? If you think I’m totally off-base here, LMK!

Everyone in mortgage has said at least once that a closing is going to kill them. But Liz Short & Brooke Lapides turned the joke into a show.

The pair are launching Murder and Mortgage, a five-part true crime podcast about cases where a mortgage, or someone who works in one, is central to the story. Episode one drops Friday, Oct. 2, & a new one comes out every Friday in October.

The idea started as a joke. Brooke was working on a MeridianLink podcast & told her coworkers they should do a murder-and-mortgage show instead. "Then I just couldn't stop thinking about it," she told me. She texted Liz, who "immediately was like, 'Yes, let's do this.'" (The texts are real. They're in the teaser the two posted on LinkedIn.)

The first case is a doozy. A couple was murdered about 20 years ago while they were in the middle of a cash-out refi w/ Countrywide. The person arrested, charged & tried for it was their loan processor. "I won't spoil what actually happened w/ the trial," Brooke said. "You'll have to listen."

Other episodes cover a victim who had been committing mortgage fraud ("Now, whether or not that was related… you be the judge," Liz told me) & a workplace dispute at a mortgage broker shop.

I admitted to them that this makes me a little worried about how common murder is in mortgage. Maybe I should be more careful about what I write? Brooke didn't exactly calm me down. She said industry people keep sending them new cases. 

One mortgage exec pointed them to Kaitlin Armstrong, the Austin yoga instructor & real estate agent convicted in the killing of cyclist Moriah Wilson. Per Brooke, Armstrong had joined a mortgage company as an LO in training about two years before that. That one might be saved for season two.

Anyway, maybe be nice to your processor?

Speaking of underwriting, I’ve received some additional comments from several brokers about UWM’s “new” Underwriting+ program. 

We’ve got the details, plus a few industry scoops for paid subscribers.