The home finance process today is more involved than it has ever been. Your willingness to provide your lender with the documentation that’s needed to keep the process moving is critical to reaching your closing date on time.
For the most part, mortgages are sold off by the lenders once they close. They also go through an intensive audit process as they are in the process of being sold. Effectively, what the lender is doing by asking for all of this documentation is building a case against audits that may come up.
Worst case scenario
In a worst case scenario, if the loan after it closes is found to be “defective,” the new investor may require that the lender buy it back. This is the last thing anyone wants to happen.
That is why lenders, from the processors to the underwriters, are so meticulous when they put a file together. Lenders would rather see an uncooperative buyer’s file sit for some time, and potentially never close, than push something through that isn’t properly documented. It really isn’t worth it to them.
While buyers may complain about all of the work and time it’s taking to get to the closing table, they need to keep in mind that no one is doing this just to make their lives more complicated.
Home finance is a business, and since the mortgage meltdown, it benefits all parties involved, and society at large, that mortgage lenders insist on this level of scrutiny.