Those of us who live and die mortgages on a daily basis often times have to go get a strong drink and just laugh.  One of the favorite topics among loan originators at the water cooler is dumb ass underwriting conditions.  Basically, conditions that need to be satisfied on a loan approval that are so absurd and illogical that all you can do is laugh about them.  Of course, the challenge is trying to explain to clients, Realtors, and others with a straight face as to why you are asking for this stuff...

Because of the market we are in, underwriters are scrutinizing every single loan application.  Unfortunately, instead of using this time to actually think and make prudent lending decisions, every loan now is underwrittten with a fine tooth comb and we are getting conditions like "loan application to be completed in blue ink".

It is getting to the point that I decided to start a weekly post called Stupid Underwriting Tricks so I can share with the public some of the absurdity we deal with from time to time. 

We recently funded a loan that is being sold to a very very large bank.  Absolutely perfect file.  A 60% loan-to-value.  800 FICO scores.  Low DTI.  Conforming loan amount. The borrowers are perfect in every single way.  The kind of loan any bank should be begging for in this market.

Get this... the investor purchasing the mortgage came back to us POST CLOSING because they want "proof that borrower is not selling vegetables."  I AM DEAD FREAKING SERIOUS.  

What happened was that the purchase contract has an addendum about personal property and the house our clients bought has a very nice small garden.  The borrowers wanted to make sure that the sellers would leave all of the foliage with the house.  Some how the post closing audit weeny at Big Ass Bank thinks the house has a working farm.  Mind you the house is on a quarter acre lot.

The house is not in a farming community.  It is a just a little suburban house in a regular little town.  The borrowers are attorneys at a major law firm.  The garden isn't big enough to produce any sustainable produce that one could actually make a living on.   How this person was able to make this logical leap is beyond me.  Is is it April 1 already?  Has this person diluted the gene pool already?  

WTF?  Proof that the borrowers aren't selling vegetables! 

I couldn't make this up if you paid me...