Reasons Why We Need So Much Documentation From You

Great post Michal.

i learned something valueable today so i can use it to explain to my client about the lenght of the loan process.

thanks for sharing.

jimmy phan

Nice Post, Michal - and congratulations for the feature!
It is helpful to know what some of the problems are due to. Unfortunately, as others have noted, fixing the problem on the backs of the borrowers is just wrong. Changing the rules (or at least appearing so) to change the rules mid-process is really hard to accept.
Thanks for sharing and I hope you're back with more notes on this process soon.
Bruce

Oh well it could be worse. That's why I get the mortgage stuff out the way before we look at homes. It makes for a smoother transaction.

I believe everything you have told me, now prove it.  Trust and verify is the by-line for mortgages, car loans, furniture loans and any other form of extension of credit in todays post economic melt down world of credit.

Get used to it, get your documents in order up front, don't bother trying to argue about it.  Remember the golden rule........he with the gold rules.  If you want the banks money to buy a house or a car or furniture or whatever provide the documentation.

Simple enough.  Welcome to the new full documentation or you don't get approved reality.

Hi Michal,
Good job explaining the mortgage approval process. This should ease frustration on the home buying process, especially for first time buyers. All the best for 2012!

Eight people to check every single items seems to be like a lot of verification.

Great info Michael but you really need a Rainmaker account to that this will be viewable by the public.  Great feature though.

Fortunately for my clients, the process is much easier because income, credit, assets and employment aren't required when a Reverse Mortgage is used to purchase a home.  A lot of my friends originate traditional Forward Mortgages, and I feel sorry for them ... every file seems to be so painful.

Mike,

My only regret about your post is I cannot reblog it and the public cannot see it.  

I agree that the real culprits are Fannie and Freddie and the political hacks who, part and parcel to advancing their agendas, pushed the envelope to liberal extremes! Like the savings and loan debacle of the early 90's, the result is more overreaction to the other extreme...and in the final analysis, it's always the consumer who gets hurt! 

Michal- You should have made this post a "Public" post, so it would grow some viral legs out there....

I agree that more should be done in regards to documentation.  I just wish that more lenders would get this done up front.  I find too many deals failing because of issues that should have been caught early.

Nice explanation yet it was Fannie and Freddie that created the terms and conditions for lenders to design non traditional loans. Now the terms and conditions have been changed and the process to underwrite those loans are still the same as they were when traditional loans were the only game in the industry. 

Mike, Always nice to get mortgage-side perspective, thanks.

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Thank you,
Ken

I was a mortgage banker in the late 80's and what you see today, is the same thing you saw then. If the system didn't greedy, the problem would have been avoided.

Hi Michal,  great post, wish more people understood this.

Have a Happy and Proesperous New Year!

It's good that there is so much documentation needed, it may prevent us from getting into the mess we are currently in, again. This is great information for the public to help them understand the process better.

Understood, but thinking a little deeper this says a whole lot about all the freedoms we've so easily lost.  We allow and NAR specifically strongly lobbies for Freddie and Fannie and other federal housing programs.  These Federal programs then not suprisingly dominate the market and now private lending and private mortgage standards are pretty much non-existant.  Now all lenders and borrower's must live up to the Federal standards or go without.  There are a few private lenders setting their own standards, but not many and as they're such a niche in the market; their rates don't compete with the artificially low rates that Freddie and Fannie forced.  We'd be a lot better off with private lenders writing their own standards, and setting their own rates. 

Dear Michal,

The previously lax underwriting standards aided foul play and are causing a lot of collateral damage to people, who had nothing to do with this. Making it tougher is a pain in the neck, but hopefully will avoid a repeat of what is still working its way through the system. Maybe the pendulum will come back to the middle soon.