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Personal Finances / Buying or Selling a Home


Subject:  Re: Mortgage Date:  9/29/2019  8:10 PM
Author:  aj485 Number:  129261 of 129285

They didn't even request to see any tax return. That surprised me. Last time they wanted to see all ~30 pages of the return.

Okay, I recall you are a serial refinancer. Was your most recent finance sometime this year, so that they already had your most recent tax returns on file? If not, are you sure you got a loan that was backed by Fannie Mae or Freddie Mac? Because Fannie/Freddie loans require solid verification of income, which generally means tax returns.

I still don't quite understand all the jobs. There is the loan officer, who is the original contact and the one who takes all your numbers. Then the loan processor who -- I guess -- collects & validates all your financial paperwork. And once the loan processor come in, the loan officer doesn't want to talk to you anymore. Then there is the "underwriter", who you don't get to talk to, who evidently tells the processor what if any additional paperwork they want to see.

Well, it depends on your lender. On my most recent mortgages, my loan officer has always been my contact, even after the processor and the underwriter get involved. She's the one who lets me know what additional information the underwriter needs, but she still had a processor assembling things for the underwriter.

I think it is this underwriter who is the one that gets picky about exactly what documentation & paperwork they want to see. It always feels like an ad hoc thing, because different ones get picky about different things.

It's more likely that something in the lender's processes, or the investor's rules, changed since your prior refinance. Lenders are always trying to figure out how to meet the investor rules with less processing. And investors do seem to change their rules rather often. But underwriters at the same lender are generally held to a pretty standard set of verification rules.

Whoa! Back in the day the ratios were like 28% and 36%. Now you're saying the front-end ratio is 42%?? Or is that the total DTI?

42% for the total DTI for a 'qualified' mortgage, which is a mortgage that can be sold to Fannie/Freddie.

Yeah, the first time, before I knew the magic words, I argued that this was silly, since I could start the necessary withdrawals now and stop them after the loan closed. They said, "Yes, I agree it is silly and you can certainly do that....but this is the requirement." And it had to be a pre-directed automatic fixed withdrawal, not a manual draw of an arbitrary amount. Silly, but there it was.

Yes. I've been told by a loan officer that "after you close on the loan, there aren't any 'IRA police' to verify that you are continuing to take the money out." But it allows the lender to show that you should have enough income to make the mortgage payments. Presumably, you will continue to take enough out of your retirement accounts to actually make the mortgage payments, since you have enough to do so.

Bureaucrats. Reality consists of only what is on the form. And if the right data is in the right line of the form they don't care if it is ephemeral.

They will care if you stop making the mortgage payments. In the case of loans with recourse, they may go after the assets that you documented on the application if the foreclosure doesn't yield enough to make the investor whole. In the case of non-recourse loans, they won't be able to go after those assets, but the lender will need to prove to the investor that you *should* have had enough money to make the payments. Otherwise, the investor may force the lender who sold them the loan to take some/all of the loss.

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