Why Do Loan Officers Ask For So Much Documentation?
As many are aware, prior to the recent housing crash, obtaining a mortgage loan was incredibly easy. Documentation requirements were minmal, approval guidelines were lenient, and loans were completed in record time...even for Borrowers who quite frankly did not look so great on paper. Like a game of "musical chairs" that seems so fun while the music is playing, yet so stressful when the music stops, the mortgage process became a "whole lot less fun" when the market took a turn for the worse.
Since then, the experience for Homeowners, Real Estate Agents, Mortgage Lenders, and related Industry Profesionals has been frequently traumatic. In addition to dramatic decreases in income came tremendous scrutiny, finger-pointing, Government interventions, law/policy changes, heightened bank bureaucracies, and a huge amount of negative media sensationalism.
In the face of these economic challenges, every now and then a member of the Media actually uses his/her voice and influcence to spread FACTS not HEADLINES. They take the time to articulate what is really going on instead of what will sell more advertising space, yet do so in a manner that everyone can understand. Earlier this month, Mark Greene, Contributor for Forbes.com wrote an article titled The Perfect Loan File which was packed with factual content that we should all be aware of. I encourage everyone (especially professionals in the Real Estate industry) to read this short article, while encouraging Consumers to do the same.
Within this article, many facts are explained, including:
- Why Loan Officers ask for so much documentation
- What Mortgage Lenders are really the most afraid of (the answer might surprise you)
- What really goes on behind-the-scenes after your mortgage has funded
- Audit-trails for a Borrower's down payment
- The dreaded "Buy & Bail" underwriting guideline which has prevented so many Homeowners from being able to buy their next home
- Seasoning requirements after a home is sold via a Short Sale
The sooner we collectively commit to spreading the truth, the quicker and less painful or recovery process will unfold. At the very least, we will have a better understand the answer of the dreaded question: Why Do Loan Officers Ask For So Much Documentation?
For more information on topics like this, please feel free to visit www.GordonMortgage.com (an educational resource for Borrowers, Real Estate Agents, and Financial Professionals). Educational content provided by:
Jason E. Gordon
Sr. Mortgage Loan Officer
CMPS, CDPE, CMC, NMLS 259027
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