Yesterday I turned in a new loan and 3 trees sacrificed their lives just for this event. Paperless? Yeah, RIGHT. In what life? Please do not let the organizers of Earth Day know that it takes as many trees to apply for your mortgage these days as it does to build the house you are buying.

The other mortgage brokers say we have just gone back to the good old days of fully documented loans. (yeah, painfully aware). I call just call it it EXTREME DOCUMENTATION.

What can you say when the file is already 3 inches thick by the time it is turned in?  I am making the assumption the Realtor also has a file 3 inches think, as does the title company. The file will still require a lender file, and hundreds of closing documents.

RIP, trees.

I am finally getting the idea that PART of the idea behind stated income loans was as simple as this: the need to move loans through the system FASTER. But now, we have the very same issues in this "slow" market. Why?

Because lenders and title companies have cut their staff to the absolute bones. At the same time, they have shifted from low documentation loans to extreme documentation loans. The result?

Loans take much L-O-N-G-E-R....... I still get embarrassed when a client signs application documents and mountains of disclosures for an hour, and then I send them off with a list of 75 more documents I will need...from tax returns to bank statements, to letters of explanation.

Paper and more paper.

Add into this mortgage stew the fact that we previously never arranged government loans here in the Bay Area. Now you not only have skeleton crews and 3 inch thick files, you also have a learning curve that is slowing the entire mortgage application process to a crawl, and even more documentation required.

I sat in a meeting yesterday and the bank rep claimed purchase contracts needed to be written for 60 days. This, when I used to be able to close a loan in 2 weeks.

"Ah yes", you are thinking, "but there are many fewer people buying houses". Correction. There are many fewer people who can "QUALIFY" to buy a house.  People are making applications in droves. 

Are houses not CHEAPER than they have been in years? Are rates not low? Has ANYONE in California decided they DON'T want real estate?

Applications are also being denied IN DROVES.  So let's see: 10 loans times 3 trees equals a whole forest. And that's just what's on MY desk this morning.

Earth Day, forgive us as forests fall in the name of something I call MORTGAGE MADNESS.

Written by Janet Guilbault, California Mortgage Expert Based Out of the San Francisco Bay Area.