Why do Underwriters feel the need to play GOD?

Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

The mortgage lending world has gone through many changes since 2007.  In the lending side, we still constantly face changes in trying to educate others as to today's realities.

While real estates agents and borrowers may not agree, all of Ellie's issues below are all very valid requests to comply with agency (i.e. Fannie Mae, Freddie Mac, FHA, VA) guidelines.  Unless it is a portfolio loan, all lenders underwrite to the standards of the agencies as well as the Secondary Market.  Unless the loan is salable on the Secondary Market, the lender is not going to fund it.

In order to use any type of income to qualify, it must be deemed reasonable and consistent to continue at least 36+ months. For disability income, temporary disability will generally not continue for 36+ months and therefore usually cannot be used.  If the disability income is deemed to be permanent, then that does meet the 36+ month requirement and can be used as qualifying income. 

In this case, the wording makes all of the difference.  To a lender, words like "temporary" and "permanent" are like "For Sale" and "Closed" to a real estate agent.  They each have very different meanings.

Unless documentation, like a divorcee decree, is presented, then the underwriter has no way of knowing when a divorce actually occurred or the ages of any of the children born from it.  Also, just because someone is divorced doesn't mean they did not later reconcile and have more children.  Without birth certificates, child support agreements, or a divorce decree, the underwriter has no way of knowing a child's age.  While child support generally ends at age 18 or when the child graduates college, alimony does not always have a time limit.  The fact the husband remarried has no bearing on the situation.  Unless the person receiving the child support remarries, then it can be paid out indefinitely regardless of whether or not the husband remarried. 

The fact is that Underwriters do not play God.  Instead, they work from factual data and not hearsay.  If you were lending the money from your personal bank account, you would be asking for much more than a person's name and phone number then giving them a loan.


Original content by Ellie McIntire 535650

What is becoming painfully obvious is that some Underwriters seemed to have developed a God Complex. They are more than aware that the fate of a loan lies in their hands and they, in my lowly opinion, are asking for more insignificant information just to make life difficult.

For example: (This is my listing- we are now almost three weeks beyond the original settlement date)

The first requirement that has made the buyers agent head spin is the insistence on having the word PERMANENT added to the buyers medical condition. A mere "this patient will never be able to work again" was not sufficient. The buyer, who us obviously disabled was forced to run around after his Doctor to have a statement provided that his condition was indeed PERMANENT!!!!!

Task # 1 completed.......can we head to settlement?

Slow down Mr Buyer......there are a few more coming at you.

The Underwriter now needs his Divorce decree.......despite being married to his 2nd wife for 18 years......from his 1984 Divorce!

The third and last (hopefully)requirement is PROOF that the children from that 1st marriage no longer obligate him to pay child support.

He divorced their Mother in 1984!

The two children in question now have children of their own!  

The poor Buyer has had to jump through unnecessary and totally illogical hoops to appease. She wanted their birth certificates as proof. None of these requirements make any sense.

HOPEFULLY we can settle this home in the next few days unless the underwriter is going to require a full blown DNA test!

Ellie McIntire Real Estate

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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!


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Comments (3)

Carol Babington
Carol Babington Associates - Las Cruces, NM

  Yes, it's true. I once had to ask a seller to find the satisfaction note on a 1957 Cadillac he had borrowed $18K to buy

in 1964...it was 1995.  Strange but true.

Oct 30, 2011 10:39 AM
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Carol....Way back then, the credit reports like we have today did not exist.  Hard to speculate on why that might have been required.

Oct 30, 2011 12:17 PM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Enjoy the season of Thanksgiving and be sure to have your camera in hand to capture those special moments.

Thursday, November 3, 2011 walk through Kentlands with camera in hand.  Seeking the colors of autumn.  Photograph by Roy Kelley.  Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

Nov 07, 2011 12:16 PM