Buyers will frequently complain that they have to provide certain information to the loan officer only to have the loan officer request the same stuff at different points in the process. Generally this will happen just days before closing and they assume that someone is really screwed up, incompetent, etc.
Underwriters have always been on the hook for audits of their work and even more so after the market meltdown. The article below implies that it is going to get worse before it gets better. Most lending institutions write loans, then sell them to Fannie Mae / Freddie Mac. If they audit the underwriten and then forced to buy the loan back, that becomes money they can't lend, which costs them money and tightens loans in general.
So when you are about ready to kill the loan officer, just understand that you may be shooting the messinger.
Daily Real Estate News | February 2, 2010 |
Accountants at Fannie Mae and Freddie Mac are auditing mortgage files to uncover loans with improper documentation about a borrower’s income, and then forcing banks and savings and loans to buy the loans back.
Freddie required lenders to buy back $2.7 billion of loans in the first nine months of 2009. Fannie Mae won’t disclose its figures, but the mortgage trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.
One result is that banks are underwriting mortgage loans even more carefully than they were last year, which can further slow the lending process.
"If you're being hit with a lot of repurchases very suddenly, the easiest thing to do is to tighten your standards rapidly," said Glenn Boyd, a Barclays analyst.
Source: The Wall Street Journal, Nick Timiraos (01/30/2010)
reproduced with the permission of the National Association of Realtors
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