The short answer – money. Not yours, not mine, but theirs. If a lender isn’t licensed in the state of Arizona, he or she isn’t going to be able to get paid for a loan completed in this state.
This may not mean a whole lot to you but for lenders who presumably need the income to, you know, pay their own mortgage and bills, not getting paid may be problematic.
So if you’re using a large national bank – Chase, Wells Fargo or (in dire circumstances) Bank of America – you shouldn’t have any problems other than the usual fun associated with the large banks. If you’re out of town and want to use Bozeman First National because you’ve been banking there for years and Bill knows you and your financials by sight, you’re going to have some problems – or at least they will when it comes time for the file to close.
Years ago one of my buyers insisted on using his brother-in-law. I knew we were in for a fun ride when we had a lengthy debate about the legibility of a faxed contract … it seemed the lender thought I ought to drive to Los Angeles’ lovely San Fernando Valley to obtain signatures so he could have them on a legible copy, as opposed to what everyone else does – put a legible copy in the file along with the signed, realizing that there will be quality degredation with each fax.
Anyhoo, we got to the closing date and were delayed without explanation. For a week. That’s when we all learned the reason for the holdup – the loan was fine, but the lender wasn’t licensed here and was holding up the file while trying to figure out how to get paid. If he’d been allowed, it seemed like he was willing to hold up the closing until he could licensed here; needless to say, he finally took the hit and we closed.
The moral of the story … I’m all in favor of loyalty. Have to be in this line of work. But if you’re buying here in the state, you have to make sure everyone’s playing by the state’s rules. Needing to be licensed here as a lender to get paid is one of the big ones.