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Old 07-05-2012, 05:13 AM
 
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Wow … my husband and I have bought and sold homes several times in the past, but NEVER have we encountered so much paperwork and so many hoops to jump through! We are supposed to close tomorrow on our new place, and we have some ninth hour paperwork shuffling we were told we had to do in order to close on time. This is the fourth time we are having to scramble for additional paperwork … stuff like a profit and loss sheet and a balance statement. Then my dad decided to gift us some money toward the home, and THAT was a nightmare! They wanted to have a paper trail showing where the money came from, what the account looked like when it left, what account it went into, and where it went from there. We've never had to turn papers like that in to get a mortgage before. Our mortgage guy showed us our file the other day and the thing is several inches thick - no lie. In the past we had maybe a half inch of paperwork or so. The crazy thing is, we had to do all of this stuff in addition to all the paperwork we turned in to be pre-approved a couple of months ago.

So what's the deal? Have the lending issues that happened a few years ago really created this big of a monster for people who are now trying to get mortgages, or am I just dealing with a super-picky lender? When I asked my mortgage guy about it, he gave me an article from Forbes magazine that talked about how difficult mortgages are to come by these days. He said it's the new norm when people want to purchase a home in today's lending market.

Those of you who pray, please pray that all goes well at our closing and walk-through tomorrow. We just had some friends of ours purchase a home last week and their closing ended up delayed because of issues with insurance and some other paperwork mishap. They had to close a week later, which screwed up everything with their moving plans. I REALLY don't want that to happen to us!
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Old 07-05-2012, 05:36 AM
 
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This is pretty common. Lenders almost ALWAYS need something last minute. My husband works in title and he deals with this everyday.

Have you READ all the paperwork is the question? I suggest you take some time and actually read it all, and see if everything is OK for you as well...you never know what you might find in there. Not reading this paperwork is what caused the bubble to burst. People either didn't understand English, or they were ignorant enough to not care about what it said in that paperwork and they were "Initialing" away like morons! Trust me, if they read the paperwork there wouldn't have been a bubble to burst, but ppl were blindsided by greedy lenders, and realtors and just kept signing away without reading what they were signing.

It has nothing to do with the crash...we bought one of our homes back in 2004, and I think we signed a ton of pages then too...same happened in '06. It depends on each one's situation.

Even if someone has 1 income, 1 bank account, and 1 job, and nothing else they're still going to have a different number of pages to sign if they got a conventional loan, an FHA, etc. When you add several sources of income they all have to be verified, which ads more paperwork.

I would say that "lenders" now they're just(finally) doing their job! Would you lend someone $200k on a wink?

I hope they don't find anything else to pick and close. My hubby just had a closing like this Tuesday with all sorts of complications, and it closed after all.
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Old 07-05-2012, 05:51 AM
 
Location: Tampa, FL
3,237 posts, read 5,143,692 times
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You can blame the banks for all the bad loans they made a few years ago to people who had no business whatsoever owning a home for the new paperwork...
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Old 07-05-2012, 06:06 AM
 
1,024 posts, read 1,490,473 times
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Quote:
Originally Posted by algia View Post
This is pretty common. Lenders almost ALWAYS need something last minute. My husband works in title and he deals with this everyday.

Have you READ all the paperwork is the question? I suggest you take some time and actually read it all, and see if everything is OK for you as well...you never know what you might find in there. Not reading this paperwork is what caused the bubble to burst. People either didn't understand English, or they were ignorant enough to not care about what it said in that paperwork and they were "Initialing" away like morons! Trust me, if they read the paperwork there wouldn't have been a bubble to burst, but ppl were blindsided by greedy lenders, and realtors and just kept signing away without reading what they were signing.
That's neat about your husband! We will be sitting down with our title company tomorrow. Yes, we do read the paperwork and we have a really good mortgage guy who spends a lot of time answering our questions and going over everything with us in great detail. He just spent about 15 minutes with me on the phone explaining our HUD-1 document. I'm sure our closing will take a long time as we want to make sure we aren't signing something we didn't bargain for.

Quote:
It has nothing to do with the crash...we bought one of our homes back in 2004, and I think we signed a ton of pages then too...same happened in '06. It depends on each one's situation.

Even if someone has 1 income, 1 bank account, and 1 job, and nothing else they're still going to have a different number of pages to sign if they got a conventional loan, an FHA, etc. When you add several sources of income they all have to be verified, which ads more paperwork.

I would say that "lenders" now they're just(finally) doing their job! Would you lend someone $200k on a wink?
Very true, although when we bought several years ago right before the bubble burst, I don't remember having to provide so much documentation. I am glad the lenders are being more careful. It just seems like some of the stuff they are asking us to do is a bit silly. Like, why do they need such a detailed paper trail with gift money? Wouldn't it be enough to just have a record of the account from where it came?

However, I still think the lenders are not being cautious enough with lending amounts. We qualified for about twice as much as what we are purchasing our new home for. NO WAY would be be foolish enough to take out the maximum amount they were willing to lend us I can't even begin to imagine the bondage we would have been under with that! But then again, my husband and I are very cautious people when it comes to money. We've watched plenty of our friends up here make the mistake of borrowing the maximum amount for a home years ago and now they are foreclosing or in a short sale situation. In my opinion, both the buyers AND the lenders were irresponsible during the bubble.
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Old 07-05-2012, 06:15 AM
 
1,024 posts, read 1,490,473 times
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Quote:
Originally Posted by crazynip View Post
You can blame the banks for all the bad loans they made a few years ago to people who had no business whatsoever owning a home for the new paperwork...
I do blame the banks, but I also blame the people who foolishly bought more than they could afford. I remember watching friends who made HALF of what my husband and I bring in purchase homes that were TWICE what we paid for ours. It frustrated me to no end because I kept thinking, what are we doing wrong? Why are we in such a small house and driving cars over a decade old when our friends who make less money are in these gorgeous brand-new homes and driving brand-new expensive vehicles?!!? To which my husband would wisely respond, "Because we are living within our limit while they are borrowing money to live a lifestyle they cannot afford without credit." Now many of those same friends are having to rent because they lost their home. While I'm sad for them, they really did dig their own grave.
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Old 07-05-2012, 06:16 AM
 
Location: Myrtle Beach
3,378 posts, read 7,904,569 times
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Quote:
Originally Posted by floridagirl777 View Post
So what's the deal? Have the lending issues that happened a few years ago really created this big of a monster for people who are now trying to get mortgages, or am I just dealing with a super-picky lender? When I asked my mortgage guy about it, he gave me an article from Forbes magazine that talked about how difficult mortgages are to come by these days. He said it's the new norm when people want to purchase a home in today's lending market.
Yep - I assume it is the norm. When we bought our house last year we went through the same thing. I don't think Mortgages are difficult to get... they just aren't as easy as they used to be. We had also purchased a home when the housing market was rocking. It was a brand new house and frankly was easier than purchasing a new car. Now - things really are the way they are supposed to be... checked and double checked. We too had money gifted to us and had to go through the same hoops you did. Nothing like telling the person who is gifting you money that you need them to do a bunch of other things too. LOL

I had prepaid legal and got a Real Estate attorney involved. He looked over the paperwork and in typical attorney fashion had some questions about certain fees saying they were too high. Of course he told us this while we were at the Title office wrapping up the deal. I thanked him for his advice but was not wanting to put off closing on the house and moving in that weekend over $200. You may want to have a RE attorney look things over though.

Closing is going to take a lot longer than you remember as well. Be sure to rest your signing hand before closing.

Congrats! Everything will work out just fine. You already made it this far, you're good. I think they always demand things at the last minute and you always hear that closings are delayed due to something missing. I think they tell you this so people take closing seriously and make sure all their i's are dotted and t's are crossed.

I don't pray - sorry. But I do wish you the best of luck and am sending good vibes your way! CONGRATS!
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Old 07-05-2012, 08:24 AM
 
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Originally Posted by FloridaKash View Post
Yep - I assume it is the norm. When we bought our house last year we went through the same thing. I don't think Mortgages are difficult to get... they just aren't as easy as they used to be.
True! And I think that's a good way to look at it.

Quote:
We had also purchased a home when the housing market was rocking. It was a brand new house and frankly was easier than purchasing a new car. Now - things really are the way they are supposed to be... checked and double checked. We too had money gifted to us and had to go through the same hoops you did. Nothing like telling the person who is gifting you money that you need them to do a bunch of other things too. LOL
Oh my goodness, YES! I felt so bad asking my dad to provide me with statements and account numbers and all of that. Poor guy wasn't accustomed to getting his info off the internet, so it was a whole new learning experience in online transactions for him. I often wonder if it would have been easier just to have him gift us the money AFTER the closing and then hand it to the lender later.


Quote:
Closing is going to take a lot longer than you remember as well. Be sure to rest your signing hand before closing.
Thanks for the heads up. We start at 1:00 pm, so I am assuming we will be finished by dinner hopefully!
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Old 07-05-2012, 10:28 AM
 
Location: Chicago
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We're going through the similar thing. My parents gave my husband and me some money to put down as down payment. The loan officer has been asking for different things. We had been following up with the loan officer to make sure they received everything they need, and even with us getting back to them in a day or so, it still took a good three weeks for them to finally be happy with what we provided them. Our mortgage guy told us that he couldn't submit our file to the underwriter until he has everything and the appraisal could not be scheduled until that point. We handed everything over earlier last week, but the appraisal was not ordered until this week and it was finally scheduled today for next week. Our closing date is supposed to be 7/30 (requested by the seller), and we're getting nervous. The mortgage guy, who originally told us he couldn't submit our file until the appraisal is done, submitted our file to the underwriter today without the appraisal, told us that the file will be fine without the appraisal, and it will take up to three weeks to hear back from the underwriter. (He originally told us it would take four days to hear back. And I was wondering if he really didn't need to include the appraisal at this point, why didn't he submit our file last week?) When my husband called him today, he told us that he can't provide us a status update on a daily basis due to his workload and it's normal not to hear from him for a week or so. (Is it?) I'm not sure if it's the right thing to do, but my husband did call him everyday to make sure he has received our bank statements, pay stubs, gift letters, whatever he asks for, whether there's anything else that he needs, and that the appraisal has been ordered and scheduled. Is this too much? Up until today, our mortgage guy has had two family emergencies and apparently "things have changed" according to him- we might not even be able to close by the end of this month. I'm not exactly sure what that means, but I was hoping the process would go smoother with a 25% down payment (we're buying a place well below our means). I didn't expect there to be so many glitches and at this point I just can't wait to get this over with.
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Old 07-05-2012, 11:12 AM
 
1,024 posts, read 1,490,473 times
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Quote:
Originally Posted by Cappuccinolover View Post
We're going through the similar thing. My parents gave my husband and me some money to put down as down payment. The loan officer has been asking for different things. We had been following up with the loan officer to make sure they received everything they need, and even with us getting back to them in a day or so, it still took a good three weeks for them to finally be happy with what we provided them. Our mortgage guy told us that he couldn't submit our file to the underwriter until he has everything and the appraisal could not be scheduled until that point.
I don't think this is right as we were able to submit a bunch of stuff prior to the scheduling of our appraisal. We had our appraisal finished a couple of weeks ago, and that was about 3 weeks into the process. Our problem is our underwriters keep wanting more documents beyond what we already submitted in addition to the HUGE amount of paperwork we already gave them, they decided they needed a profit and loss statement from my husband at the ninth hour this week. We really had to scramble on that one as he was just starting the process of filing his quarterly taxes!

Quote:
We handed everything over earlier last week, but the appraisal was not ordered until this week and it was finally scheduled today for next week. Our closing date is supposed to be 7/30 (requested by the seller), and we're getting nervous. The mortgage guy, who originally told us he couldn't submit our file until the appraisal is done, submitted our file to the underwriter today without the appraisal, told us that the file will be fine without the appraisal, and it will take up to three weeks to hear back from the underwriter. (He originally told us it would take four days to hear back. And I was wondering if he really didn't need to include the appraisal at this point, why didn't he submit our file last week?)
Maybe the underwriters changed their minds? In our case, we did have to get a repair finished prior to the appraisal, but our file was still submitted even though it lacked the appraisal.

Quote:
When my husband called him today, he told us that he can't provide us a status update on a daily basis due to his workload and it's normal not to hear from him for a week or so. (Is it?) I'm not sure if it's the right thing to do, but my husband did call him everyday to make sure he has received our bank statements, pay stubs, gift letters, whatever he asks for, whether there's anything else that he needs, and that the appraisal has been ordered and scheduled. Is this too much?
I'm not a broker, so I don't know. I do know we called our guy a couple of times a week and he stayed in close contact with us himself. I feel like we've been treated very well so far the only aggravation is with the, "Oh, now we need you to send us THESE documents. And it needs to happen TODAY or we can't close on time." YIKES!!!

Quote:
Up until today, our mortgage guy has had two family emergencies and apparently "things have changed" according to him- we might not even be able to close by the end of this month. I'm not exactly sure what that means, but I was hoping the process would go smoother with a 25% down payment (we're buying a place well below our means). I didn't expect there to be so many glitches and at this point I just can't wait to get this over with.
I am not really familiar with how the whole process works and the particulars of your situation, but our mortgage guy seems a bit more helpful than the one you're dealing with. We didn't put down quite as much as you did, so I would think your situation wouldn't be as difficult as you are describing but like I said, I am not a broker and don't know exactly how the process works. Our broker said the mortgage process isn't as fun as it used to be, so maybe your guy is feeling the stress of a more complicated process now.

Sorry about your situation, but you still have time for it all to pull together by the 30th.
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Old 07-05-2012, 11:13 AM
 
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It should have been like this long time ago!

If you have gift, you have to document everything. This is simple the bank want to make sure that the person giving you is not lending you, which will change your debt-to-income ratio.

People who have lots of deduction and show smaller income by way of losses will have to pass more hoops. It is funny people who has side business show all their "losses" during tax time and then ask a bank to lend them money telling the bank they can pay them back with no problem with their "undeclared income." This is too common and the banks know this. I am not saying you are doing this but this is what the banks are facing. I have a colleague who make upper five figure on w2 and has a business also. He tried to get a "measly" 150K for a house and a bank denied him. Just only his salary would have allowed him to borrow over 300K, if that was the only thing reflected in his tax returns.

The mortgage forum is full of people like him and they need first to show a higher net income before a bank can lend them. They can't have it both ways.

I will also say it depends on your mortgage officer. If he is competent, he should know what the underwriter needs and not just show you some news paper article on how things are tight now. Yes, things are tight but that is his job to prepare you sometime ago not now at the 11th hour, the LO should know better than that.

Good luck to you.
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