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NINJA loans are back. That is no income no job or assets. Billy and Susie buy a house, move in and make payments for a while. Susie's gets pregnant and quits her job. Billy finds a new girlfriend. They split. Nobody makes payments on the house. The bank forecloses.
Susie stays in the house. As long as she pays the light bill and the house is occupied, the bank keeps it on the books. Susie thinks she owns the house because Susie is clueless. The bank has it on the books as a "performing asset". Yes, the system is that corrupt.
You can get dinged for more documentation AFTER you close. Happened to us when they went to sell our loan. I was so ticked off at our loan officer by then I was about to tell him to pound sand. Then I found a fine print clause deep in the paperwork where I promised to "cooperate with any documentation requests pursuant to the sale of the loan." Penalty for non-compliance? Loan could be called and due in full immediately.
Can't you avoid such problems by waiting till the money has been in your account for a certain amount of time before you apply for a mortgage?
Or if that wouldn't work, what's the easiest way to launder the money to avoid being suspected of money laundering? I don't mean illegal money, but your own legal money, which needs to be laundered to avoid all the excessive paperwork and bullying by making your own money seem spotlessly clean so even the most pathetic bully can't find an excuse to harass you about it.
I would do 6 months with no cash deposits and only direct deposits from verifiable sources coming in. They only ask for 2 months of statements, so that should be enough, in theory.
Is this normal? They keep asking for more....every transaction they have to source?
It can be a pretty awful process. I did a refi a year ago which took years off my life. It wasn't so much what they asked for, it was the fact they always asked for things and needed them ASAP! But they were things they could've asked for in the very beginning of the process.
The kicker was after I closed with the settlement company, the lender asked me for another bank statement. Because they said the statement I had provided earlier for my checking account didn't have sufficient funds to close with. I explained on that statement which was a month old I hadn't transferred the money over from my savings account yet(they had the savings account statements). They said they needed a current statement just to verify I actually had transferred the funds over and settled. I said why not just verify with the settlement company that I settled and paid the amount due? I initially refused to give them any more documents because I had already closed and it seemed ridiculous but then my loan officer threatened that if I didn't they wouldn't fund the refinance, and then I would be on the hook for 2 loans(current loan which lender didn't pay off and new loan). I asked how I could be on the hook for the new loan if they didn't fund? He didn't ever give me an answer on that but I eventually just gave them the statement and they funded but I was fully expecting them to see something on the new statement they didn't like and the circus to continue.
TL;DR obtaining a loan can really suck depending on your lender/loan officer
I always figured that the lender was letting me borrow hundreds of thousands of dollars on my promise that I will pay it back. They are potentially waiting 30 yearsto get their money back. With a (currently) ridiculously low interest rate (my mutual fund investments earn more than my 3.5% 30 year mortgage.)
I always thought that borrowing money was a privilege, not a right. Yes, I earned that privilege by managing my money properly, repaying my debts on time, and never exceeding my ability to repay those debts.
I always figured their requests for documentation were their due diligence to learn whether or not I have the integrity and character of earning their trust to borrow a heck of a lot of money from them.
We recently did a refi. I've been a mortgage loan underwriter, and now I'm a real estate agent, so this was definitely not my first rodeo. I documented six different ways to Sunday from the very beginning of the process, as I had attempted to anticipate everything that would be necessary.
I thought I was going to go insane from the incessant "one more thing." Finally, the underwriter supposedly was asking for one last thing, and I said, "NO." It was information that had already been provided at the beginning of the loan process that they "couldn't locate", and at that point, I didn't really care if we got the loan or not. Which I told the loan officer - nicely, but he knew that at that point, I was over it. And it was a refi, so it's not like I was emotional about it.
It can be a pretty awful process. I did a refi a year ago which took years off my life. It wasn't so much what they asked for, it was the fact they always asked for things and needed them ASAP! But they were things they could've asked for in the very beginning of the process.
The kicker was after I closed with the settlement company, the lender asked me for another bank statement. Because they said the statement I had provided earlier for my checking account didn't have sufficient funds to close with. I explained on that statement which was a month old I hadn't transferred the money over from my savings account yet(they had the savings account statements). They said they needed a current statement just to verify I actually had transferred the funds over and settled. I said why not just verify with the settlement company that I settled and paid the amount due? I initially refused to give them any more documents because I had already closed and it seemed ridiculous but then my loan officer threatened that if I didn't they wouldn't fund the refinance, and then I would be on the hook for 2 loans(current loan which lender didn't pay off and new loan). I asked how I could be on the hook for the new loan if they didn't fund? He didn't ever give me an answer on that but I eventually just gave them the statement and they funded but I was fully expecting them to see something on the new statement they didn't like and the circus to continue.
TL;DR obtaining a loan can really suck depending on your lender/loan officer
If you had to bring funds for closing, every lender I know of would have required the same thing. Again, the key here is if you need funds for a mortgage banking transaction, you need to prove those funds are yours (with statements reflecting a 60 day history). Now if you had shown them the checking account and the other savings account, since both are liquid, there is no need to show it going into your bank account. But if it's a stock account = paper trail. If a statements out of date, we aren't mind readers as to where the funds will come from. We have had people actually decide to put 5K or 6K on their credit cards for closing costs. That would not be a sharp bulb or a bright tool.
I always figured that the lender was letting me borrow hundreds of thousands of dollars on my promise that I will pay it back. They are potentially waiting 30 yearsto get their money back. With a (currently) ridiculously low interest rate (my mutual fund investments earn more than my 3.5% 30 year mortgage.)
I always thought that borrowing money was a privilege, not a right. Yes, I earned that privilege by managing my money properly, repaying my debts on time, and never exceeding my ability to repay those debts.
I always figured their requests for documentation were their due diligence to learn whether or not I have the integrity and character of earning their trust to borrow a heck of a lot of money from them.
Silly me.
Those are all true, but I think on the other hand, just as you expect to keep your word, you have every right to expect others to as well. Therefore, if someone says all is good, then comes back with multiple requests it's not crazy to be a bit miffed.
Same goes through for being professional. If many of these things were handled more professionally instead of in slipshod fashion it wouldn't be as bad. Unless these companies just started doing loans yesterday, they probably should have a good idea of what they need up front from borrowers and have little need to ask for last minute documentation unless something truly changed.
I also think there is a good amount of general frustration on people's part as well as they've handled their finances, the lenders didn't handle theirs which caused much of this, they got bailed out and many of the deadbeats who (I don't care what they say if they got a loan for twice the house they should have they were not "preyed upon") got to walk away without paying and now the decent borrowers are paying the price.
Why not assemble all the documents they're ever likely to request, put them in a folder on your computer, and every time you get a request for another document or another copy of a document, attach it to an email and send it? How could it take more than a few minutes per request if you do it that way? If they give you a vague request, just attach all the documents and send that. It hardly seems like it's worth putting a lot of time, effort, and aggravation, into such a make-work chore that can be done mostly by computer anyway.
This was 5.5 years ago so I don't recall exactly, but believe it was my bank statement(s) showing where I had cashed in a CD and deposited it into my checking account. They already had the statement from my credit union showing the CD.
I think the process was so irritating because it was our first mortgage taken out post-bubble and I was surprised there was so much nit oicking. Mr. Dokie and I both have credit scores north of 800, have no debt except one car loan, secure Federal pensions, were buying a house about $15,000 below appraisal and about a 40% LTV and payments about 15% of our monthly income. In other words, a pretty good risk. But in today's world, that don't count for sh**.
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