It's not just the more restrictive guidelienes, it's the excessive paperwork and the underwriting.
It use to be that you would get an AUS (automated underwriting system) approval upfront and away you'd go. You'd address the findings and the conditions, package the loan, and ship it off to the underwriter for validation.
Not so any longer!
The loans must now be investor quality. The chic new tern is "overlays." So to speak, they lay over the existing guidelines, with new can do's and don't's. Unfortunately they are often not known until your file hits an underwriter, who may override the AUS approval.
I also was introduced to a new term;
"False Findings!"
That's where you had a AUS approval and the underwriter doesn't agree that the file meets the criteria. Kinda like the NFL, "upon further review...."
The next area which has gotten a little crazy is the supporting documentation. In the olde days, I mean the real old days, we used to state that the underwriters role was to find a way to turn down the loan. I wouldn't say that it's gone that far, but the request for supporting documentation has increased dramatically. The loans are still getting approved and closed, but the paperwork is excessive.
One of the HUGE propblems here is that when there is a request for additional paperwork it takes additional time in underwriting. It really slows down the approval and closing times.
Okay, so what's the solution?
I'm not sure what the solution is to the "paperwork crisis," but I do believe now more than ever;
We all need to keep our heads, work together, and get to the closing table!
ps; how do you like that "paperwork crisis," I stole that from the national media, everything these days is a "crisis."
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Thats one problem that most of my agents have been having lately is getting people approved. Seems like the purse strings have been sinched down really tight.