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What Lenders Really Look For (and How Agents Can Avoid Delays)

A Professional Guide by Blue Castle Title Services


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In the Arizona real estate market, speed and accuracy are not luxuries—they are the backbone of every successful closing. Yet, many transactions slow down (or collapse entirely) because agents simply do not know what a lender actually looks for once a file moves into underwriting.

At Blue Castle Title Services, we see these issues every day. This guide breaks down—clearly and professionally—what lenders examine, why it matters, and how you can prevent delays before they ever reach the escrow desk.


1. Identity Consistency: Names, Signatures, and Legal Variants

The first thing a lender verifies is the identity chain. Any discrepancies trigger immediate review.

Agents should check:

  • Middle initials missing

  • Maiden names still appearing on documents

  • Trust names vs personal names

  • Spouses not listed where legally required

  • Signatures that differ from IDs


Why it matters: A mismatched name can halt the file instantly, requiring updated contracts, addenda, or corrected IDs.

How to avoid delays: Send a copy of IDs before opening escrow.If names appear in different formats, clarify in writing and share with your escrow officer immediately.


2. Contract Accuracy: Dates, Terms, and Missing Initials

Lenders scrutinize the contract for consistency:

  • Contract dates that do not match addenda

  • Missing buyer/seller initials

  • Box selections left blank

  • Earnest money amounts inconsistent across pages


Even one small oversight can force the lender to request re-execution, causing 24–72 hour delays.

Professional tip: Have your title team review the contract the same day it is executed. Blue Castle offers complimentary contract review for all partners.


3. Source of Funds and Earnest Money Documentation

If earnest money is incorrectly documented, lenders cannot proceed.

Common issues:

  • Earnest money deposited late

  • Earnest money coming from a different name than the buyer

  • No proof of wire or deposit

  • Cash deposits (big red flag)

  • Gift funds not properly paper-trailed


How to avoid delays: Document every transfer clearly and send proof to both lender and escrow right away.


4. Property-Related Red Flags on the Preliminary Title Report

Once the lender receives the prelim, they examine:

  • HOA liens

  • Tax delinquencies

  • Solar leases and UCC-1 filings

  • Unreleased deeds of trust

  • Judgments

  • Boundary or access issues

  • Trust documentation irregularities


A lender cannot proceed without resolution.

Your advantage: Blue Castle issues early title reviews, so these red flags are caught days—or weeks—before they cause trouble.


5. Occupancy and Use Clarifications

Lenders verify whether the buyer is purchasing the property as:

  • Primary residence

  • Second home

  • Investment property


Any discrepancy between application and contract triggers re-underwriting.

Example: A buyer claims “primary residence” but currently lives out of state → lender questions intent → delay.

How agents help: Ensure buyer and lender align on intended use before sending the contract.


6. Seller Legitimacy: Fraud Prevention Protocols

One of the lender’s silent but critical tasks is verifying the seller’s identity.

They look for:

  • Sellers using newly issued IDs

  • Signatures that differ from recorded deeds

  • Unexplained changes to vesting

  • Ownership transfers just before listing

  • Out-of-state or international sellers signing remotely


We run multi-layer fraud screening as soon as the file arrives—protecting agents from the nightmare of a fraudulent seller.


7. Document Timelines: Why Speed Is Everything

Lenders review the timing of:

  • Signed disclosures

  • Earnest money deposits

  • Inspections

  • HOA resale documents

  • Payoff demands

  • Trust papers

  • Probate and court orders


Even a one-day delay in document submission can push closing by a week.

How to stay ahead: Blue Castle provides agents with a transaction timeline and reminders so no deadlines are missed.


8. What You Can Do Today to Avoid Most Delays

Here is the truth: 90% of lender delays are preventable. Agents who master the basics close faster, communicate better, and gain a reputation as professionals.


Your Pre-Escrow Checklist:

  • Get buyer IDs early

  • Verify contract accuracy

  • Confirm earnest money source

  • Ask the seller about solar, liens, HOAs, judgments

  • Request trust or probate paperwork immediately

  • Share everything with your escrow team the same day


Blue Castle Title Services: The Partner Behind Smooth Closings

At Blue Castle, we don’t wait for problems—we detect them before they reach the lender.

We provide:

  • Early contract and prelim review

  • Fraud screening

  • Escrow-ready file preparation

  • Priority communication

  • Education for agents and brokers

  • Risk analysis on complex transactions


Work With a Title Team That Protects Your Reputation

(602) 753-9582

Phoenix AZ

info@bluecastletitleservicesincom

 
 
 

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