We talk about tightening lending standards all the time these days. How tough the banks are to deal with and how we're always waiting to the last minute before we know, for sure, that a contract is actually closing.
A recent Forbles article, The Perfect Loan File, is a must read if you are considering getting a new loan or refinance, or if you are a real estate agent or loan processor. It's not always that the lenders are that difficult, but rather that the borrowers are.
To summarize the article, the lenders these days are asking for FULL
DISCLOSURE from potential borrowers. They want their full work history, income, available cash, etc. In a lot of situations, the real reason that the loan process is delayed or extended is because the borrower, whether knowingly or not, has not given all the requested paperwork to the lender for review.
As the writer of The Perfect Loan File says, when the lender asks for something and you are wanting to know why they need it, just stick with what our parents always said, "Because I said so." Because bottomline, they are going to need it if you want to get the loan.
As real estate agents and loan officers, I think we need to do a better job of explaining what is expected from the buyer/borrower in the loan process upfront. I think a lot of the borrower's reluctance or delay in getting the needed info could be avoided if we, as servicers, make the borrower aware of what will be needed and when.
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