You never really hear about why lenders ask for additional information. In days gone by you would fill out a 1003 Uniform Residential Loan Application without giving it much thought. You tried to answer all the questions correctly and if something was off you just made the adjustment before it went to the underwriter. Today all the information is scrutinized like never before and all the parties to the transaction get logged in to a cross verification system ie dataverify.com (or similar system) which generates it's own score from the information provided.
These systems protect the Lender/Fannie/Freddie/Hud and the reason I make this point is and as an example I just had a file that came in which on the Schedule of Real Estate owned the borrower only listed the current property he owned. I didn't think much of it because when I looked at his credit report there were no other outstanding mortgages. But when run through dataverify it flagged the file because it showed that he bought another property in 2004 but never showed when he sold it (keep in mind there is no outstanding mortgage). Now comes the questions…What happened to this other property? Does he still own it? Why was it left off? Is somebody hiding something? I called the borrower to see what was going on with this other property and as it turns out he sold it years ago, but nobody made the entry from the bank to show it sold even though the mortgage showed paid. I asked him for a copy of the Hud-1 settlement statement from when he sold it and this solved it, but to say it's easy to get blind sided with these cross check systems nowadays is an understatement.
The end result was we closed his loan on time and I had my processor send credit the information so he does not run into this again. But borrowers should be prepared to give additional information even when it sometimes doesn't make sense in their eyes.
Hope you found this useful and are having a great day!
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