Apr 22, 2013

Tip 12-2013: Loan Underwritter - New Four Letter Word in Lending

You are buying your first house and have done everything your loan officer has requested. You have provided documents in triplicate and proven that you have more than sufficient income to qualify for the loan. Then, three days before closing, your loan officer says the "Underwriter" is requesting what seems like ridiculous demands or the same information previously provided but in a different format. 

DO NOT FEAR! The lender's "Underwriter" is not the "Undertaker." You will get the loan. Just be patient and understanding. Prior to the mortgage crisis of 2007, loan processing was too lenient. Now, in order to avoid the problems of the past, the pendulum has swung back in the opposite direction. 

Today's loan approval process is much stricter and detailed. It is the "Underwriter" who reviews the loan application, the financial documentation, and the appraisal with a "fine tooth comb." Everything has to be 110% correct in order to be finally approved for the loan. It's simply the current lender climate (the new sign of the times). 

Every realtor and loan officer needs to caution the Borrower (purchase or refinance) that the loan process will be very detailed and complex. It is normal for the lender to continue to request more information up until closing. The Borrower need not start a conversation with the loan officer asking, "Why do I need that?" or claiming, "I didn't need that last time." As long as the Borrower is flexible and understanding, the loan will eventually be approved. Just cooperate with all the crazy requests, and you will get the Underwriter's "final approval" to close. 

PS. A number of our local lenders recommend that the Borrower read The Perfect Loan File from Forbes Magazine.
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

William D. Tucker, III
Tucker Griffin Barnes
Charlottesville, VA

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