Getting a mortgage approval isn’t what’s tough for most consumers. Rather, it’s the challenge of meeting the new documentation requirements that sends most people screaming for the hills.
So says Mark Greene in Forbes. Greene argues that most lenders aren’t looking to underwrite the perfect loan (e.g., one that pays back the lender on time). Instead, they are looking for the perfect loan file.
Greene explains that mortgage lenders have suffered staggering losses — and many have gone out of business — due to the recent wave of substandard, poorly underwritten loans that required them to buy back those bad loans.
The surviving lenders are determined not to go through that hell again; as a result, they’ve created much more stringent underwriting guidelines and procedures.
Translation, says Greene? Be prepared to “scan, photocopy, fax, and deliver every aspect of your financial life.”
Every nook and cranny of your financial life has to be corroborated, double- and triple-checked, and reviewed again before closing. This way, if the originating lender has created a loan file that is exactly consistent with published underwriting guidelines and has documented while adhering to those guidelines, the chances are that your loan will not be subject to repurchase.
For more on what borrowers need to do to prepare, read Greene’s full article: The Perfect Loan File.
And for a personalized consultation or help with securing a mortgage, give Pacific Union’s partner, Mortgage Services Professionals, a call at 415-345-3006.