Monday, December 28, 2009

Loan Documents

One of the primary causes of the global financial meltdown last year was the large number of bad mortgages. During the housing bubble, lenders were approving loans that should have never been approved. Many people were buying houses with $0 down, or taking out loans that they cannot afford to pay monthly.

Fast forward to today. I just bought a house with my parents and escrow is supposed to close on Wednesday. However, I'm going to the escrow company again today to sign documents for the third time. Supposedly, the lender didn't like the way I wrote my "9" on the dates... they said some looked like "P" instead. Huh? Anyway, when I went back to resign, the escrow company had me write down the same date as before. Now it seems the lender doesn't like that either so I have to resign them again.

In addition, this lender has requested an extraordinary amount of paperwork. I've bought a house before and refinanced a few times and it was never this much trouble before. I recently sold some stock and deposited the proceeds into my savings account so the lender wanted to see my stock/options portfolio detail too. I just forwarded them my down-payment wire transfer confirmation plus transaction detail from my checking account for the last month. All this work and I'm only borrowing 1/3 of the value of the house. The mortgage broker said that the level of scrutiny on each loan has gone way up recently. Sigh... if they had done this much due diligence before the financial crisis, we wouldn't be in this mess.


Of course, as soon as I bitch about documents, the mortgage broker called and said that the lender needs more stuff. I had sent them the first page of my checking account statement since it has a summary of the balance. I didn't want to send them the transaction detail since it was really none of their business who I pay and receive money from. But since the first page says "Page 1 of 4", they want the rest, even though two pages are blank. Anyway, at the risk of losing my locked lower interest rate, I ended up sending it. Frustrating... :(

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