Real Estate Broker Shane Todd likes to tell the story of the first time he worked with Leslie Girard and Evergreen Home Loans on a home purchasing deal.
Todd, a Vancouver Coldwell Banker Bain agent, had a set of buyers who insisted they wanted to purchase their home through an online lender rather than a local one. So the buyers got a quick and poorly vetted approval letter, went through the entire home shopping process, and then found out three days before close that the supposedly low rate the online lender had offered came with an astronomical set of fees they couldnât afford.
âAt that point they finally agreed to meet with Leslie at Evergreen,â Todd said. âShe met with them, gave them first position priority, and we actually managed to close that loan within those three days of going into her office. I had never had an experience like that. It saved the deal.â
Girard is the producing branch manager and loan officer at the Vancouver location of Evergreen Home Loans on Park Plaza Drive. Sheâs been in the mortgage lending business for about 20 years, including 11 years at Evergreen, and sheâs been on the front lines spearheading the bankâs Security Plus Seller Guarantee and strong up-front vetting process for home loans.
The Security Plus Seller Guarantee, which pays out money to the sellers if the buyerâs financing fails at closing, has been around during Girardâs entire tenure at the company. But about four years ago, Girard and Evergreen decided to hire more staff to bulk up on the pre-approval process and make an âapproval express lane,â as Girard calls it.
And a few months ago, the company decided to up its game even further, raising its seller guarantee from $1,000 to $2,500, which has really turned into a win-win for everyone involved, Todd said.
âIf you want the competitive edge, you really need to spend the most time on your finances â and that youâre getting the right loan offer for your needs,â Todd said. âOtherwise youâre just winging it.â
Evergreen is based in Seattle and operates in Oregon, Washington, California, Idaho, Arizona and Nevada. Itâs also licensed in Alaska, but has no branches there yet.
âWeâre growing in all those states,â Girard said. âWeâre West Coast, and weâre staying here. We donât really want to expand to full national.â
Evergreenâs pre-approval process isnât particularly strange for buyers, but it does take more time before they can hit the road and go house shopping. The security of knowing how much money you have and what you can really afford, though, is a huge benefit, Girard and Todd said.
âWe still have the same conversations with buyers,â Girard said. âBut we do more up front. We gather all the information, asset documentation. We verify employment and run tax transcripts with the IRS before issuing an approval letter.â
Approval letters from other institutions are often only very weakly vetted at the start of the lending process, which can lead to significant problems and surprises down the line, Todd and Girard said. But buyers canât shop for homes without one.
Buyers used to get away with a lot more before the home lending market crashed in 2008. The crash got rid of some of the worst lending practices, but for some reason the weak pre-approval process remains at most companies, Girard said.
âBefore 2008 or 2009, there were so many products,â Girard said. âYou could get away with just using your stated income and nothing else for approval. Those days are gone. You have to prove your income now.â
Most mortgage lenders still only do a quick credit check and then get the approval letter out fast so the buyer can start shopping, but that can lead to problems like the one Todd faced when he first worked with Girard.
âThose big lenders, itâs kind of garbage in, garbage out,â Girard said. âThereâs more to this than a quick conversation and an automated system.â
The problem with the quick pre-approval method used by big lenders usually occurs at closing time â when the real underwriter gets a look at the approval. Underwriters often remove variables like overtime income, part-time income or other revenue that borrowers canât always prove are consistent, Girard said.
âSelf-employed folks, a lot of them make good money, but what they show on their taxes is very different,â Girard said. âThey often write a lot of things off for taxes, but you also have to prove what you make. So if you have $20,000 as your bottom line, it wonât show for much when youâre looking to buy a house.â
Some people also sock money away at home instead of putting it in the bank, which is also a bad idea if youâre looking to buy a house.
âMore and more people anymore have money under the bed or at home somewhere,â Girard said. âWe canât use that. It has to be sourced in an account. And you donât want all that to come up when youâve found your house.â
It costs Evergreen extra to have staff to do the up-front approvals, but itâs worth it because of the reputation the company has gained from the practice, she added.
âWe have to hire loan processors specifically for this, because itâs important to us,â Girard said. âThereâs a lot of detail. And if people donât make it through the process, thatâs good too. It means we didnât put a buyer on the market who couldnât afford to buy.â
Buyers also face financial consequences if a deal falls through because of bad vetting. They can lose thousands of dollars in fees, money thatâs often critical for their next home-buying attempt, she said.
âWe really, when we push our letter out, we want people to know it means something,â Girard said. âThe challenge on our part is when I meet with a buyer and theyâre anxious to buy a house. I have to tell them âslow down, we need to do this first.ââ
Once they have Evergreenâs pre-approval letter and the seller guarantee, though, buyers find they have a real advantage in the market.
âWeâve had buyers in areas we do this that will actually get lower offers from sellers [rather] than competing offers because they want the seller guarantees,â Girard said. âRealtors also really like the guarantee because it cuts down on problems at closing.â
Thatâs certainly been true in his experiences with Evergreen, Todd said.
âHundreds of buyers later, and weâve never had one fail or come in late through Evergreen,â Todd said. âNot a single one.â
Right now, the local market is saturated, with very limited options for buyers. So the process of buying a home is highly competitive, and Evergreenâs policies have helped his clients win bids, Todd said.
Sellers fear loans failing in escrow because it can be extremely expensive â forcing them to pay additional mortgage payments, taxes and securities. So the guarantee is an extra draw for them that can put Evergreen borrowers on stronger footing than competing offers.
âGetting an offer that has the assurance itâs going to close allows the homeowner to make their own plans, knowing if it falls through it will save them a lot of money,â Todd said.
Some other regional lenders have copied Evergreenâs early vetting process, but none of them do the $2,500 guarantee.
âWe have some competitors that have copied us, but in their small print, it says if the buyer does certain things, they wonât cover it.â Girard said. âThey have so many loopholes, they donât have to pay. We back that buyer. And we do pay.â
The company hasnât had to pay out the guarantee much, because the vetting process is so good. But they have paid it out on occasion, she said.
In one incident, a buyer was fully approved after securing some gifted funds from parents for a down payment. The buyer got into the contract and then the parents decided they didnât like the property and pulled out. The problem wasnât the buyers or sellers fault, so Evergreen paid the seller.
âIt has no value if we never pay it,â Girard said. âSo we donât mind paying it.â