I'm in the process of buying a house. All is well, my credit and income to debt ratio is grand, my FICA score is through the roof. I've been renting this house for a couple of years, and now the owners want to sell, so we made a deal. I'm buying the house that I live in already—The owners and I get along famously and the house is a peach. We decided to do it ourselves without involving a real estate agent. I've never done it like this before and neither had the seller. ITS AN ADVENTURE FOR CHRISTSAKE!!
We are now at the point of getting the loan past the demon of the deal—the Underwriter. I've had at least a couple of bone-headed questions from the underwriter so far and, frankly, I expect at least one more. I really wonder what the basic qualifications for being a real estate underwriter are—Must be something akin to being an IRS examiner—You know...Someone who knows absolutely nothing about anything. Sorta like Barack Obama’s qualifications to be President of these United States.
I took a look at http://www.mortgagewealthadvisors.com and found a list of the most moronic questions that borrowers had to answer on behalf of the underwriter—Here's the list, from some frustrated borrowers:
-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.
-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.