Home : Blogs : Melissa Kulikoff : Melissa's Blog

Why Do You Need More Info On Me? I Have an 800 Score

Why do you need so much of my personal information? I have an 800 credit score and 20% down? I could buy this place for cash if I wanted to liquidate my 401k or stocks? Last time I bought a home they just wanted my pay stub, why do you want my tax returns? Are you out of your mind?

YES- Lender's are out of their minds, dealing with fraud and new government regulations.

Get used to it. More papers to sign, more info required from the buyer.

I have many perfect buyers with excellent credit, jobs, 20% down payment.... you name it, they have it.

BUT- Lender's are still going to put your client through the heavy wash cycle on high heat before approving a loan.

Your best bet is to work with an experienced Loan Officer. I also used to be an underwriter, so that helps :)

I explain to my clients, that we are not poking at their personal finances, we are simply verifying information. I am not looking at your bank statements to see where you went to dinner last weekend, we don't care. We are looking at the bank statements to ensure that you are the same Miss. Smith that I have a credit report on. We are making sure someone else is not paying you to buy the home for them.

More regulations will come out Jan 1st, 2010, I will adapt to them and continue to be the best in my field.

If buyers know up front what is expected, they are happy to provide it. I'm happy to answer their questions as to "why this or that", it's my job.

I may not be perfect, but I always plan ahead and my clients appreciate it.

Melissa Kulikoff
Texas Loan Officer

Residential Lending Services
cell: 210-849-9030
email: melissa@mkulikoff.com
For Home Loan Information

Posted by Melissa Kulikoff on 10/09/2009 10:03 PM

Comments (38)

Lender's Wanting More Info From the Buyer in the ActiveRain Channel

why does the bank need more, san antonio, tx mortgage lender

Originally posted at: : Why Do You Need More Info On Me? I Have an 800 Score

This post has been included in Texas Information
Post is included in group: Outside Blogs
Post is included in group: Christian Mortgage and Real Estate Professionals

38 Comments on Why Do You Need More Info On Me? I Have an 800 Score

OCT

It always amazes me when regulators go from one extreme to the other. It will probably be many years before the process opens up to allow creditworthy people to buy.

I had a customer who was thinking about investing in a restaurant. He wanted to lease for a year with an option to purchase. Said that he wanted to see if the restaurant would be a success first before he bought the building. The seller said he would agree if the buyer would provide financials. The buyer actually said that it wasn't any of the seller's business and refused to provide any financials. Needless to say the seller did not proceed with the deal. I cannot fathom why he would feel that his financial information wasn't any business of the seller. Real Estate is just a little off kilter right now.

I agree, thanks for the comment.

Carolyn,

From the commercial real estate side, things are "off" as you put it. Perhaps even worse than residential.

OCT

Melissa - Most people hate change, but I think it gives some of us an opportunity to surpass our competiton by adapting quickly, and providing better service.

OCT

Great post. It's the proverbial pendulum--swings too far each way. I'm re-blogging!

I have had recent clients with 30 plus years of stable financial history, great credit and stable work history. Unfortunately both husband and wife were self employed. She sold her business for a significant return before the move and his business has always been conducted using phone and fax and now internet. After the third request from Wells Fargo's underwriter for letters requesting what seemed to my client to be rediculous details that were not financial in nature (they had provided tax returns and bank statements), they elected to pay cash instead of have a 50% LTV loan.

Lenders want all the info they can get, and they know that the application process is the best way to get all the good stuff. If they need to sue you later they know where all the assets and income are, at least at the time of the application process. And they want to be sure that you (the borrower) can actually afford to borrow the money. The courts are now making the lenders qualify the borrowers as to "appropriate" loans, that is to say the borrowers are not permitted to make a decision that does not meet current lender's standards. A high credit score reflects past behavior, not future behavior or circumstances. Credit reporting agencies are constantly refining their formulas but it remains an inexact art.

"This is a great time to buy a house!"

Akron, Ohio

About 4 years ago we got approved for a new mortgage - without having to sell our existing home AND without needing to verify income (self employed) ... credit score was king. Anyone who experienced THAT is in for quite a shock now ...

Yes * it is an over reaction and will level out in time; however, buyers who are not used to the new requirements don't know what they are missing - owners who have purchased before are the ones who are shocked!!

Yes, things have changed dramatically. They needed to. I think your point about telling clients what to expect up front is very valid. I always react better when forewarned.

Seems like responsible, credit worthy buyers would know this but if they don't they will soon learn!

To that end I am putting together a program just for self employed buyers that is a creative solution to standard qualifying. Simple,fast, and will be the answer for some. Will be available nationally.

Look for even slimmer pickins ahead. The qualified borrower pool is quickly evaproating what with the prime and jumbo, 5yr. fixed, interest only and neg ams kicking in the next couple of years. Add to that the declining commercial market and we've got some real challanges ahead.

Hi Melissa, That is the credit market today and it will probably tighten even more. Nice pic of you enjoying a ride with your buddy ! I'm envious !

I learned in insurance where ever there is lots of money there is lots of fraud. People need to understand they are not being singled out, you are just doing your job to protect all the honest customers.

Yeah, more banking regulations written by the likes of Blarney Frank, Chris...I can't believe I got that interest rate Dodd, Charles....what I have to pay income taxes on my income like the rest of you? Rangel and the other crooks that make up this disfunctional, crooked, abhorrent and crminal enterprise we all have to bow down to.

Sh*tcan them all. NEVER RE-ELECT ANYONE.....EVER. And that goes for Repubics, too.

That would be the Govt. way, never look in the mirror but instead assign blame and then use idiots to fix the imaginary problem.

Don't misunderstand me, there is a real problem but that's not what Barney, Dodd and the like are trying to fix. What they're trying to do is protect the powerful Banking Lobby by putting Mtg. Brokers out of business.

If the Banks have no competition and the consumers have no choices, that would make at least a 50/50 chance the Banks could make enough money to compensate for their gross mismanagement and maybe even come out ahead.

Of course the entire cost of this fix falls on the consumer but Barney, Dodd and Co. think that's OK, the consumer will bounce back AFTER the foreclosure avalanche, tax hike, health care debacle, 12-15% unemployment... and we'll be happy about it because we all need to pitch in together to make these Banks profitable again!

Melissa,

An underwriter????? I've never heard anyone admit to being an underwriter (or,even a former underwriter!) So they really do exist! I've always thought it was a make-believe character that was used in a BLAME-THE-UNDERWRITER situation! Glad to "meet" you!

And thanks for the heads-up for 2010!

Kathy Opatka

Melissa,

I agree with term limitations. This too shall pass, but without Barney, Dodd, and Co. in their Washington D.C. seats.

Visit me on Facebook

These days mortgage brokers are becoming less reliable than Banks. I refer all my clients to B of A, Chase, Wells Fargo and SunTrust. That way I know we have the best chance of closing.

I had many fall outs with Mortgage Brokers in recent times as their lending sources are becoming very capricious...

Ben,

GREAT POINT, that is why I am NOT a mortgage broker. I am a direct lender. There is a huge difference. We do not farm out loans to an investor hoping for the best. All underwriting, processing and funding of a loan is handled in my office. After the loan is fully funded and closed, we sell the loan to one of the big 4 investors.

I have found that retail operations at BofA and the other big box banks you mentioned are not capable of closing loans on time.

Thank you for your reply.

Steve,

Thank you for the re-blog, I am honored. I also subscribed to your blog. We both seem to have a lot of good information to share with the AR community.

When my borrower asked me why I needed more info on him, my response was, "Would you give someone several thousand dollars without knowing for sure about their identity and financial status?" After exchanging his initial quizzical look for an "oh, I got it now" look, he said, "Okay, you will have it by the end of the day." Loan closed. The rules are there for a reason. Not everyone is out to commit fraud, but we need to check and balance.

As another Direct Lender, I can attest to the above reply/comment from Melissa. The big box banks, for the most part are not capable of the speed, agility, & most of all experience & savvy that is required in todays mortgage origination field. That being said, there are many fine professionals emplyed by these big firms, I am sure. However, it has been my own personal experience that what takes @ 3-4 weeks or more I can do in 3-5 days, with the same type of rates & fees if not better. I do agree that it is now a difficult time to be a mortgage broker, because wholesale & third party origination channels are drying up quickly. Some folks would rather deal with a large brand name, but this does not always guarantee the best results. Caveat Emptor.

Jeff,

Excellent response, I agree with you completely. Isn't it amazing that people do not know the difference between a broker and a direct lender?

I didn't know Freedom had a retail side. Back when I was a broker, we sent loans to your company.

Small world.

I recently had clients contact a big box bank and the current turn around time for a purchase was 60 days and for a refi 90.

Why do they advertise so much on TV if they are not even capable of closing loans within a reasonable time frame?

Kathy,

I was an underwriter for a large national bank for 5 years. Prior to that I was also the "big bad" person that negotiated short sales in the 90's for the lender. I was a loan officer right out of high school, during college for a "big box bank". Been there and done that.

I enjoy being self employed and that is why I've gone back to being a loan officer. My Realtors certainly appreciate that I know how to fully underwrite a loan, all by myself, on a weekend. I can review 2 inches of tax returns in 10 minutes and calculate the income within 10 bucks.

Many loan officers are just sales people. I'm not.

OCT

Just had to comment on your comment #2 - Carolyn, it's even nuttier when the person selling the business refuses to disclose the financials. I've had that happen. They want the buyer to just believe them when they say how much money the business takes in.

Good post. I explain to customers that the banks just don't trust anyone anymore, and most agree that it's for good reason and then stop complaining!

Ben, I'm befuddled by your comment about mortgage brokers. Don't you realize that mortgage brokers have those lenders available to them that you just mentioned? I can send any of my files to Wells, Chase, Bank of America, etc. Wouldn't you rather send your clients to the broker who has ALL of the lenders at their disposal than just one of them? If we're all working for the same banks, the percentage of loans that get closed by the brokers and the retail shops should be about the same.

And why waste your clients time by sending them to just one of the banks? If you send them to a broker, their file can be sent to a multitude of banks. By doing that, you're helping them get the best deal and the best rate.

Melissa, great post!

I wrote an offer the other day and the listing agent asked me for proof of funds, W2, and copy of credit score in addition to the pre-approval. The next thing I heard from the client, they asked me to tear up our Buyer Agency Agreement. I believe now that it was my fault for not explaining why these things were being asked for. I wish I had read this post last week!

it is interesting how it hapens, you either have people that understand and agree with the process or those that fight every step of the way, offended at even the thought of asking for verification. You are right, I've found that if it is explained right up front, they know what is happening and are cooperative, it's all in the prep work!

As always in a correction we swing from the right to the left. Hopefully with a recovery starting to raise itself we can see a return to normal conditions in loan underwriting.

As a loan officer and real estate agent, I get this all the time from people with good credit and I have to remind them about why they want all this information. I am going to re-glog this as well.

I am not looking at your bank statements to see where you went to dinner last weekend, we don't care.

Melissa - I thought that you normally do this for fun during the evening and weekends. Just kidding.... but it is a good point. Clients always need justification on "why?" we need the transaction history. You made an excellent point. We are making sure someone else is not paying you to buy the home for them.

OCT

Very true Melissa. Now people need to actually prove that they can and will pay their loans. That is not such a bad thing. Right?

Anyone who took out a mortgage prior to 2000 will not have any surprises since most of the "new" rules are simply the "old" rules back in vogue.

Great post, congrats on the newsletter feature. Yes it's true, you better 'reveal' yourself with your clothes on with your next loan application. Things have changed and even people with good credit are as you say 'getting put thru the ringer'. Every single loan I've got going is getting the same treatment.

Love your horse! I had a pinto and a buckskin when I was growing up!

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?