A middle-class applicant looking to finance a median-priced home may end up with just a few hundred pages. Business owners on the other hand, or affluent people with more than one stream of income "can generate paperwork better measured with yardsticks than page numbers" according to an article published on CNN Money.
So what do these mortgage files include to make them so thick? In each one of them you will now find a credit report, appraisal and property information, income and asset records, two years tax returns, two months' bank statements, sourcing of every deposit, and other financial documents. Due to the tighter rules put in place, "the disclosure documents alone account for nearly 50 pages" according to the article.
According to the post 9/11 Patriot Act legislation, no matter how much money you have in the bank, you have to show the source of your recent deposits to make sure you are not suspected of funneling money to terrorist groups.
Just the checklist lenders use to manage the application can run three pages long, with 55 separate boxes to check, covering items like the good faith estimate, asset statements, and the original appraisal report.
Gone are the days when you signed your name and got a check. No one expects to get through the process of borrowing tens or hundreds of thousands of dollars too easily. Yet, filling yards of paperwork does not help the housing market recovery process either.
Read the entire article here...
The process was smooth all the way up until we locked a rate and proceeded to closing. Long story, but number of items were missed by the office staff while Andrew was on vacation causing us to 1) be delayed past our lock period and 2) cost us more to close than told originally. http://mortgageloancenter.org
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