Online VA loan community yourvapro.com says bank failures have caused a huge bottleneck for customers trying to get a home mortgage loan or refinance.

The problem started last year when the mortgage industry cut 75-80% of its staffing.  Then the economy soured and the federal government cut interest rates to historical lows.  Suddenly demand spiked and mortgage lenders didn't have the staff to respond which has crippled the market said Eric Kandell, Manager Flagship Financial Government Loan Division.  Flagship Financial is an approved lender for yourvapro.com.

Now mortgage lenders can not hire fast enough.  Then the banks got into trouble and the credit crunch hit.  Most of the smaller middle man banks closed.  The result is that just a few large institutional banks are left to handle most of the loan processing and mortgage companies are short staffed.

Customers are waiting longer to get loans approved and funded.  Wells Fargo, Countrywide, and Citi have all seen large increaseds in the number of mortgage loans and refinances because of record low mortgage rates.  They can't meet the demand and that means customers are waiting longer.  They can't get anyone on the phone, said Kandell.

Flagship Financial has the experience to help.  yourvapro.com works with Flagship Financial, a mortgage lender who understands these issues.  Flagship's loan officers have been working 14 hour days.  They are doing all they can to facilitate an easy process for clients in light of this major log jam the industry is suffering, said Kandell.

Two weeks ago Chase, one of the few banks still offering loans, left the wholesale and third party loan origination business.  That crippled the market, making things even worse.  Now only the bigger banks are left to service this huge industry.  Borrowers and homeowners need to be patient and work with mortgage companies that understand these frustrations.  Flagship Financial can lock loans for longer - for both 45 to 60 days.

How has this affected consumers?  They are seeing huge delays or problems even getting loans.  While many homeowners need the reduction in their monthly payments, getting a loan can be a frustratingly long process.  Underwriting turn times went from 48 hours up to 4 weeks at some banks.  Some are even denying loans right at closing.

Flagship Financial and yourvapro.com have advice for people who are looking for loans - along with a $250 guarantee.  Borrowers need to be patient and trust that we will get them closed as fast as we can.  We still stand behind our $250 guarantee to offer the highest level of service, whether for veteran loans (www.yourvapro.com) or other loans, says Kandell.

Consolation comes knowing that although there are still issues, working with Flagship Financial has advantages.  Nate Burt, Loan Officer, many of our large lending partners, like Wells Fargo, have coined 'stop brokers' or given us special tier services so that our clients don't have to wait at the end of such a long line.  Our dedication to loan management and service has allowed us to come out on top of this big mess.

Rates have risen slightly recently, which means more customers will try to lock in against further increases.  Given the banking climate, and uncertain future, lowering monthly mortgage payments can help alleviate financial stress for years to come.