I am a real estate broker...I get offers (mostly short sales) from agents who have clients who can't close. That really sets me off. I ask the pre qual lender if they have verified income and credit assuming they will tell me the truth. They all say they have; but most have not. I find that out after I have submitted the offer to the short sale dept and done all the work. What the heck is up with all the nonsense and wasting my time. How do I retaliate and hold some of these mortgage brokers to task for not being legitimate.
I would really like to nail one of them so the others will stop the nonsense; we actually count on the mortgage broker to be a little legitimate. I thought of making them prequal with my lender, but I hate that when I have to do it myself.

When they have actually done the verifications, then we refer to that letter as a "Pre-Approval".

Of course, we still have some Lenders (or Mortgage Brokers) who write letters that they call Pre-Approvals; but then in the body of the letter they will say that this Pre-Approval is subject to their verifying the information that the future Loan Applicant told them . . . . which means you can go and throw that one into the bin of Pre-Qualification Letters.

My most favorite one was where the Husband neglected to tell his Wife about the Delinquent Alimony and Child Support that was in his history . . . . in fact he had neglected to bother even telling her that he had been married before. So that new Marriage ran upon the rough shoals of Divorce Court (or annulment) because of the difference between Pre-Qualification and Pre-Approval. Lying on a Marriage License Application is usually considered a Felony too; just like lying on a Loan Application.

I'm just glad that this confusion afflicts Brokers and Agents (and even some Lenders) country wide. And when we are confused by the terminology, it's no surprise that the Buyers and Sellers are confused, is it?

I run into it all the time. I would not strickly put "Mortgage Broker" in the limelight on this one. I am a Mortgage Banker so I am somewhat defending my competition.

Most of the Mortgage Banks who have depository accounts do not have enough loan officers to handle the high mortgage demand since most mortgage brokers are gone. So, they do not take the time to make sure everything is solid.

I have realtors complaining about various local banks with loan officers I have met and know are capable. These loan officers are making mistakes that should not happen. Such as a debt to income ratio being too high right before closing and after 2 contract extensions.