Usually when a loan is run through the automated system you can check income and assets, make sure you have your ducks in a row and issue an approval letter. As long as the findings on the automated approval are met the loan is able to be sold to Fannie Mae or Freddie Mac. While I agree with some of the more risky programs being eliminated (no doc, stated income, and no ratio) I believe that the underwriters are now being overly conservative. I recently had a borrower who had excellent credit putting 20% down on a home. Perfect borrower right. The lender issued an approval asking for a current cell phone bill. I spoke with the underwriter and they said that they underwrote a bit differant than the Houston branch that I was used too. What does a cell phone bill have to do with a mortgage loan. This borrower has no collections and has never missed a payment in his life.
Another one had a 682 credit score putting 20% down. Approve eligible through automated system. They asked for a verification of rent with a prime lender. The findings did not ask for it they said it was just another layer of protection.
While there are still lots of options for borrowers who are able to prove their income and are not credit criminals this was a bit too much.
All in all I guess those with the gold make the rules and I get to sell other peoples gold for a living.
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