Realtors know that prequalification and preapproval letters from most mortgage companies aren’t worth the paper they are written on. This is hugely problematic because realtors depend on the validity of these letters in order to assure buyers, sellers and other agents that their transaction will close.
At Mortgage Portfolio Services, prequalification and preapproval letters are not written until we have at least two banks or mortgage investors that will purchase the loan. Furthermore, added language that changes a prequalification letter to a preapproval letter is not placed into a letter until documents have been gathered from the client verifying their prequalifying data.
At MPS, we would rather refuse a realtor a prequalification/preapproval letter for a short time, than issue one that is not valid.