OK, so you know that getting a mortgage is going to require that you do some paperwork. But OMG! Where does it end? The answer is "when it ends".
Just like a detective follows clues to find a perpetrator, loan officers are now being forced to "follow the money" back to its source.
In evaluating a borrower’s ability to repay, a lender cannot
rely solely on information told to them by the borrower. To properly validate
the consumer’s ability the lender must use reasonably reliable third-party records. This is the primary cause of Borrower Frustration and Lender Angst.
The lender is compelled by
the Ability to Repay (ATR) rule to fully document all sources of income and align that income with
assets in to make the ability-to-repay determination. In effect, the lender has to make a road map of all your income and expenditures so that they can stay in compliance with the rules. So, the gift that you got to help with the down payment? It was income to you, so its origin has to be mapped back to the source, just like your pay stub maps back to your employer.
The lenders are doing this because deep within the legislation, it says that a borrower can potentially sue the lender - including every single person who ever touched the loan - if they ever default on it! Lenders aren't dummies, so they look as far ahead as possible. If a lender has to defend against a lawsuit like this, they will have to prove that they considered each of eight ATR factors. As a result, loan files are being documented
detail; not only to provide a mortgage, but to the extent that they could stand up to
litigation as well.
Next up - the eight ATR Factors
#RealEstate #Avondale , #Goodyear , #Buckeye , #Glendale, #Phoenix, #Surprise, #Peoria, #Tolleson, #Laveen, #Waddell , #Wittman
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