Reasons Why We Need So Much Documentation From You

Mortgage and Lending with Guaranteed Rate Inc. - NMLS #2611 NMLS #370763

Reasons Why We Need So Much Documentation From You

As you prepare for a mortgage application, I want to educate you on why we ask for, what may seem like, an excessive amount of documentation during your mortgage process.

Due to lax underwriting from 2004 to 2008, Fannie Mae and Freddie Mac decided that they weren’t being strict enough on mortgage bankers and upgraded their standards in an attempt to prevent default mortgages, which began in 2008.

In order to sell any loans to Fannie Mae or Freddie Mac, lenders have to make sure we meet their requirements. This has led us to tighten our standards. If we fail to comply with Fannie Mae or Freddie Mac’s obligations, whether a loan is performing or not, Fannie Mae or Freddie Mac will pursue other options.

To prevent this, we now have at least eight people check every single item to prevent any possible mistakes. We want to be absolutely certain that we don’t have to buy back a loan from Fannie/Freddie and this results in an increase in requested documentation and scrutiny for each loan.

While this can cause some frustration and possible delays in getting to closing, this overly-cautious approach is our way of making sure your loan is accepted by Fannie Mae or Freddie Mac and your mortgage goes through.

For more information, contact me, Michal Bander at Guaranteed Rate - 954.684.9227

Happy New Year

Posted by



Michal Bander
Vice President of Mortgage Lending


P: (954) 684-9227
F: (954) 867-5123
NMLS ID: 370763


4400 N. Federal Hwy. Ste 150 • Boca Raton, FL • 33431

NMLS ID 2611
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Comments (29)

Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

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.


Dec 30, 2011 12:23 PM
Robert L. Brown - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

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.

Dec 30, 2011 01:00 PM
David A. Weaver
Peoples Bank & Trust Co. - Scottsdale, AZ
24 years helping folks finance their dreams.

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.

Dec 30, 2011 05:13 PM
Digital Digital
Alachua, FL
full service

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!

Dec 30, 2011 06:04 PM
Toronto, ON

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

Dec 30, 2011 06:08 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

As the years go on and some folks find different ways to scam banks and some legislatures want to feed their industries some business, all forms will get longer and there will be more of them.

Dec 30, 2011 10:11 PM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

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

Dec 31, 2011 04:20 AM
Raymond Denton
Homesmart / Evergreen Realty - Laguna Beach, CA
Laguna Beach Realtor

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.

Dec 31, 2011 04:36 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes


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

Dec 31, 2011 05:26 AM
Dennis J. Zisa & Associates, Inc.
Dennis J. Zisa & Associates, Inc. - Camden, NJ
31 years in So. Jersey and the Greater Camden area

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! 

Dec 31, 2011 05:50 AM
Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

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

Dec 31, 2011 06:14 AM
Roger Newton
Roger Newton Real Estate - North Plains, OR

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.

Dec 31, 2011 12:21 PM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

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. 

Dec 31, 2011 08:00 PM
Richard and Jean Murphy
Harborview Properties - Portland, ME
(207) 712-4796

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

Jan 01, 2012 02:22 AM
Ken's Home Team LLC. | 360.609.0226 | Portland, OR & Vancouver, WA Real Estate Team
Ken's Home Team LLC. - Vancouver, WA

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Thank you,

Jan 01, 2012 03:59 AM
Winston Heverly
Winston Realty, Inc. - Atlantis, FL

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.

Jan 01, 2012 12:01 PM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

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

Have a Happy and Proesperous New Year!

Jan 01, 2012 12:18 PM
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

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.

Jan 02, 2012 12:54 AM
Alan Mackenthun
Bridge Realty - Shakopee, MN

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. 

Jan 02, 2012 03:07 AM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

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.

Jan 02, 2012 09:39 AM