More Questions for Mortgage Applicants
More Questions for Mortgage Applicants
It is normal that lenders would require financial statements and paid bill receipts from their clients who would want to avail a loan, however nowadays; these institutions are requiring more than just financial information.
According to Frank Donnelly, the current president of the Mortgage Bankers Association of Metropolitan Washington, there was a recent case of abnormality in one of their borrower’s bank account;the woman had to explain a deposit of $200 in her account. She explained that the money belonged to her ex-husband that she has been raising a child with.
The loaning party required for a copy of her divorce papers even if she and her ex-husband have been separated for 17 years. Borrowers who have been processing for long term loans know how closely these institutions are watching their clients’ ability to payback their mortgages.
Lenders are taking strict measures because they want to prevent buying back loans if the loan fails. Customers will have to face tougher security and submit more supporting papers to answer the questions of the consumers.
For some these procedures that lenders are taking are too much, but for a lender’s point of view, they are trying to save themselves from the casualties incase all-else fails. Not only are they afraid of buy backs or failure on the loans, the Consumer Financial Protection Bureau, the government agency in chargeto investigate these institutions are very critical and strict in their guard against rule breakers.
But Stella Adams, a fair-housing advocate in North Carolina, said lenders are going too far. She said banks should use “solid, old-fashioned underwriting,” such as the guidelines used before the housing boom. Right now, lenders are making it too difficult for people to get financing, she said.
But Christie Alderman, a vice president of a loaning industry defends their side from scrutiny. According to her, the system they are imposing is their way to defend themselves from scams and deceit from consumers.
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