'I'm a little put out…'

If you have been party to any home financing recently, you’ve probably said the same thing: “This should not be anything of concern, as I have very strong credit.”

Welcome to my world. Once upon a time, the mortgage process was easy. All you needed was a good credit score and a working pen – we were closing loans within a week. That all ended almost ten years ago. I used to keep track at ML-Implode. com, the site that kept a list of which lenders folded each day. They still list 388 mortgage company implosions. And we’re still feeling the shockwaves.

Lots of legislation has passed in the meantime, all of it intending to protect consumers when accepting new financing. Whatever kind of loan you’re getting to buy your home, the underlying debt is being sold on the secondary market. That means the eventual “owner” of your note is a big institution far away. You’re a little piece of a giant pool of loans.

But still, these days the buyers of mortgage debt are re-verifying everything. The entire machine is built to find deficiencies in our loan files. When that happens, the loan originator is required to re-purchase the loan. Imagine that: Your local lender gives you a loan for $300,000, sells the note, then is later required to repay the $300,000 debt. It really jams up the warehouse line of credit used to fund everything when all that money stops flowing.

All this explains why, regardless of how much documentation you provide up front, you’re getting calls to the bloody end to provide more. Believe me, it isn’t fun to request additional paperwork when we’ve tried to be so thorough at the beginning. The happy ending is twofold: One, you have your new amazing house, and two, we won’t bug you anymore.

Tammy Engel is your local Mortgage Advisor, and has been working for your best interest since 1990. Contact her at 661/822-7325 for purchase, refinance, and reverse mortgage.