Do you really need all this personal information for my mortgage?

By
Mortgage and Lending with WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 NMLS 244226

As a Roseville mortgage broker, I get this question a lot from home buyers, especially ones who have applied for mortgages in the past.  I coach buyers (new and experienced) that the current lending environment and process is much different today.  Lenders/investors aremortgage application requiring much more information from borrowers than in times past.  This is very frustrating to many buyers. It doesn't make sense, especially to the ones that tell me they pay all their bills on time.

 

Pay stubs, two months of bank statements with all of the pages (even if they’re blank?), Federal taxes, divorce papers, copies of Driver’s and Social…the list seems endless.

 

It’s important to understand the lender’s perspective when you are applying for a mortgage: they don’t know you and you are asking them to give you a lot of money.  Naturally, you should expect them to ask a lot of questions so they can ensure that they are going to get their money back!  

 

The mortgage crisis taught us many things—most notably that borrowers who were not thoroughly screened for loans had a very high default rate.  So, in an attempt to keep future losses at a minimum, lenders now go overboard screening loan applicants and applications.  Every buyer should expect to submit a lot of paperwork for even the most seemingly straightforward loan.  Rest assured that the loan officer doesn’t want to shuffle any more papers than necessary so you won’t be asked for anything that isn’t really needed!

 

 

Related posts:

 

Buyer Beware: the Underwriter May Be Googling You!

 

Remember that Kid in Your Class that Kept You from Recess!

 

Common Documents Required for a Mortgage Pre-Approval

Comments (6)

Melissa Polce
ERA, Wilkinson Real Estate Charlotte - Huntersville, NC
Lake to Land, I've Got It Covered!

it is almost ridiculous the amount of stuff you all need to ask for, not to mention the mounting stips in the end! Good luck! 

Oct 16, 2009 08:55 AM
Kenneth Cole
Weichert Realtors Appleseed Group, 2043 Richmond Ave. S.I.N.Y. 10314. office phone 718-698-9797, Appleseedhomes.com... - Staten Island, NY
NYS Licensed Real Estate Salesperson

Ridiculous to ask the giver of a small gift to show all sorts of documentation as to where they got the money from.

Oct 16, 2009 09:02 AM
Ed Gillespie
WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 - Folsom, CA

Both great points!  My understanding about gift funds is that lenders are wary of "seller inducements", so they ask for a signed gift letter and a copy of the asset or bank statement from the giver to proove their capacity to give the money.

Oct 16, 2009 09:42 AM
Elizabeth Bolton
RE/MAX Destiny Real Estate Cambridge, MA - Cambridge, MA
Cambridge MA Realtor

Hi Ed ~ So many buyers nowadays seem completely clueless about mortgage applications.  If you're asking to borrow a boatload of money expect to jump through some hoops. Buyers take offense -and act like it's a big surprise - when asked to provide even the basics.  Pull your papers together, make copies, and answer questions - asap.  You would think given all the problems in lending that buyers would be johnny on the spot but the opposite seems true.

When I applied for a mortage - a couple of years before this mess - I had to document several deposits. One was from a seller reimbursing me for money I lent her and several others were reimbursements from my aunts for putting the lunch after my grandmother's funeral on my credit card.  I typed up a letter that spelled out exactly that.  Didn't think twice - though I have to confess to taking a bit of pleasure in having it be the funeral reimbursement - take that!  I thought.

Liz

 

Oct 16, 2009 01:32 PM
Ed Gillespie
WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 - Folsom, CA

Thanks for you comment Liz!  It kinda reminds me of when I was a kid and whining about having to eat my vegetables.  It didn't help and couldn't leave the table until I had eaten them.

Oct 16, 2009 02:25 PM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Ed - Oh Lord, you're singing to the choir.  The LOE's are driving me crazy.  I've had to do LOE's for a couple of deposits that one of my clients made after having several garage sales.  I had to do another one when one of my clients sold one of his motorcycles.

The real kicker was the one I had to do just recently to explain why one of my clients didn't have more debt because none of his open credit cards had any balances and his only debt was a car loan.  SERIOUSLY??? 

I was told to get credit ratings on his non-reported debt (i.e. car insurance, cell phone, etc.).  I was told by my client's car insurer that it would take an act of Congress to get them to release any financial info on my client, even when my client authorized them.  Needless to say, after that, I switched lending sources and will never use that lending source ever again.

Oct 17, 2009 03:36 PM