Underwriting. It's about as mysterious as how they fit those little decorative ships into bottles or make head cheese. The rules of lending have changed and those that enforce the rules and help create loans that can be sold are in a position of power and pressure. Mistakes cost money, lots of money. So it goes without saying (but we'll say it anyway) that your loan will be scrutinized. It's nothing personal, but at times it will feel that way. And you may find yourself asking:
Is This It?
We get asked this question a lot. When we collect the first round of bank statements, paystubs, tax returns, and other documents from you, we try our best to anticipate what the lender is going to need. The reality? These days, they are asking for more; a lot more. From letters of explanation to tracking down large deposits and showing where they came from, there is more documentation needed than ever. Which means we need your help.
Don’t These Underwriters Use Common Sense?
Once in a while yes. But for the most part, underwriters these days are trying to meet the increased demands of more work and tougher lending guidelines. Many lenders sell their loans to investors and after a historic wave of bad loans and billions of dollars in losses, it’s no surprise that your loan is going to be a little harder than your friend or family member who “never had to go through this” when they got a loan a few years back.
Am I Approved?
Once an underwriter works through the file we carefully submit to them, they issue a conditional approval. That's when your K&H team goes back to work to clear up many of the outstanding items that remain in an effort to get your loan to closing. Expect to hear back from your loan originator or processor as we may need things from you at this point to move from approval to completion.