Stips N Stones
Congratulations to all of the home buyers and new loan applicants who have recently closed a transaction. In an effort to ensure the successful sale of loans on the secondary market, banks have been very particular about the contents of every loan file.
The incessant request for more stipulations is commonplace in the industry, so remain positive if you are in the middle of the process and wondering if your loan officer has the wherewithal to accomplish the task.
Most consumers who are midstream in the process might feel as though they are being singled-out. But rest assured, you are not alone. Every applicant from the $45,000 loan to the jumbo-sized $1.5M loan is having to submit a lot of information, just shy of a blood sample. It is important to understand why the extra paperwork would be required.
The bank who originates the loan must be prepared for an in-depth examination of each loan file. They will attempt to sell the loan files in batches to investment firms that will work to protect the investment portfolio. Due the decline of the market and this lack of careful scrutiny into these loan files, it became increasingly difficult to sell even the cleanest of files over the last 3 years.
We can look at this in a positive light and be thankful that Wall Street is doing their part to ensure that quality files will reach investment firms.
So the next time you are begrudgingly gathering that last bit of information, know that you will be rewarded at the end of this process. Your loan officer is using this information to secure your loan file in a market that is apprehensive, at best.
We can all breathe a small sigh of relief with the knowledge that when your loan qualifies, it is a sound and sensible investment for everyone, including you, the consumer.