Loan Denial due to not having friends
NO FRIENDS 
NO LOAN IS THAT LEGAL?
I had a client, non-U.S. born but U.S. citizen, who had moved from California to Dallas area from his job. He had great income, professional management position and great credit score. He got qualified and purchased his dream home, however, at closing the title company put a form in front of him to write down names, phone numbers and addresses of two family members, relatives, friends that they know him but don’t live with him. His family and relatives were all living outside of the U.S. and he knew a few coworkers living in California but did not know their addresses, etc. He signed all other papers, except that page. we left the title company. Seller supposed to come after us and sign their papers, then lender fund and we get notify of closing and get the key.
Two hours later, the title company called me and said if my client doesn’t come up with two names and addresses, the lender will not transfer the fund and we will not have closing. Wa!
I got really upset and I don’t think the lender’s request was legitimate. So, if a well qualified U.S. Citizen doesn’t have family, relative or friend to list he will be denied of getting a loan? Mortgage lenders should not lend money based on the applicant’s friend names and addresses.
I know the intention of the lender: they want to be able to reach/find the borrower if he disappears! However, just putting some peoples address or phone number do not obligate other non-involved with the loan to reveal information to lender if they don't want to. Currently, I know this is a VA rule, but still I don't agree with it.
I explained the situation to my client, but he agreed that we both go back to the title company and he put information about two new guys from his new job (with their permissions) in the form and we closed the deal.
To the mortgage lenders, a person's credit score represents his/her likelihood of making on-time mortgage payments for the next couple of years, based on the person’s recent (e.g., last two years or so) payment history. Therefore, it is very important to have a good/excellent credit history and credit score. But having a friend or not, should not affect the applicant’s ability to pay. The mortgage lender should not approve or disapprove clients based on whether or not applicant has family, relatives and friends.
Is that legal? What do you think?
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