I recently read an article in Loan Officer Magazine, written by Karen Deis, that made me laugh out loud. Karen is the Founder of Loan Officer Training, Publisher of Loan Officer Magazine and Mortgage Currentcy.com, and she is a mortgage and real estate industry veteran and expert.
I recently had the opportunity to meet her and I can attest she’s a lovely lady as well. With her permission, I’ve republished her article below:
What is the most stupid condition
you’ve gotten from an underwriter on a mortgage file?
By: Karen Deis, LoanOfficerTraining.com
Well, I asked that question on Facebook and here are 24 of them that will make you laugh your guts out (or cry because it’s so sad what the borrowers have to go through go get a loan approved these days).
I was shocked by the number of posts I received:
- Underwriter wanted “high school transcripts.” (even though out of school for several years)
- Underwriter would not allow escrow for scraping and painting condition on appraisal. It’s Michigan in January and underwriter was in Arizona.
- Underwriter wanted proof that borrower was no longer under house arrest.
- The 1003 showed they had a 1-year old child. Underwriter wanted a Letter of Explanation explaining why the child was not listed as a dependent on the previous year’s tax return. Then when the letter was written saying that the child was born after the tax return was filed, the underwriter wanted a copy of the birth certificate.
- Underwriter wanted the death certificate of a borrower’s husband and a Letter of Explanation as to why her social security benefits were reduced.
- Underwriter wanted a letter from a bank teller confirming that she was the one who helped the “gift donor” purchase cashiers’ checks for the gift funds.
- I had a teacher who taught at a Catholic High School and the underwriter wanted a letter to prove that the school was part of the local Catholic school system.
- Letter of Explanation from a single dad who had custody of his child, that he did not have to pay child support. (Never saw a condition that a single mom had to write such a letter.)
- The VA Appraiser wanted a “red colored” room repainted a neutral color.
- Borrower wrote a check for $167 to Kroger’s for groceries. The underwriter wanted us to verify that they did not have a loan with Kroger’s.
- Underwriter made a comment they wanted an updated appraisal, even though it was not expired. Said that it must be old because in the picture the trees in the background were still green. They were evergreen trees.
- A source of funds letter for a $12 deposit.
- Letter of Explanation from a borrower as to why she changed her name after she got married.
- Proof that a borrower does not own a home they sold 10 years ago. It’s hard to prove something you don’t own.
- Borrower’s mailing address is a PO Box. Underwriter wanted a letter from USPS that they actually own a 10” post office box and that it’s their primary address.
- Letter of Explanation as to why a borrower who works for Microsoft (or any major company) works in a different location than the address listed on the paycheck stub.
- The underwriter asked for an updated bank statement (which is normal). The borrower wrote a letter explaining the dollar amount he had in the bank.
- I called HUD to ask them a RESPA question and the guy at HUD asked me to explain what RESPA was.
- Letter of Explanation from a doctor that the borrower has been healed and his illness will not come back.
- Letter of Explanation on a $6 deposit from a borrower who made $10K per month.
- VA loan. Borrower was a hooker and declared her income on income tax returns. Had to get affidavits from her “regulars” that they were her clients.
- A photo of a “Radon Test.”
- Borrower’s occupation was a “homemaker.” Underwriter wanted a Verification of Employment form completed by the employer.
- Borrower deposited $235 in checking account from garage sale money. Underwriter wanted copy of an ad proving she had a garage sale.
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.