Buyers beware: new lender tricks

Under-rock dwellers might not be aware that there’s a lot more documentation involved in getting a loan to buy a home now than there was a couple of years ago. I’m not saying that that’s a bad thing, but I do believe there’s a point at which some of the new lender requirements might stray into the category of “Oh, come on. Are you serious?”
At our weekly Zephyr sales meeting this morning, a mortgage broker presented us with three new things that buyers (or owners who are refinancing) need to know so they’re prepared to buy and they don’t, ahem, screw up their deal at the last minute.
Numero Uno on the list of new rules is that many lenders will now require that any deposits made (other than payroll) into the buyer’s checking account for the prior two months be sourced. This means that if Grandma sends you a check for ten bucks for your birthday, you’ll have to show a copy of that check. So, buyers out there, if you’re planning to buy a place in the next few months and you occasionally deposit checks that aren’t your paycheck, keep a copy of the check. I don’t know what they would do if you deposit cash — ask for a photocopy of your Benjamins?
The next new rule: many lenders will now run the buyer’s credit immediately before funding the loan. If the buyer’s debt load has increased, the loan will have to go all the way back through underwriting. Again. So, buyers, listen up: don’t buy a couch and a Viking range and a new Rothko for the living room wall until AFTER your loan funds. Yes, this is the day before you close, and yes, that could make you wait a few more days for delivery of whatever you need to get set up in your new place, but it’s better than not getting your loan. Right?
The last new one has to do with consumer credit disputes. When a consumer files a dispute against a creditor, that credit line is removed from the calculation of the customer’s credit score. Apparently some savvy customers got wise to this fact and would file disputes against creditors to whom they had made late payments (which lowered their credit scores) in order to remove that negative impact from their credit history (thus raising their scores). Lenders are now requiring that all consumer credit disputes be resolved before they will make the loan. So, if you’ve got a late payment, your credit score is likely going to suffer for it.
The pendulum has obviously swung pretty far in reverse of the easy-money days. Buyers and refinancers, be ready to answer requests for documents, documents, documents.