A loan package came back missing four items that nobody flagged as required
Here is a case worth studying, because it happens to people who should know better. A borrower six years into the mortgage business assembles a loan file for a duplex in North Raleigh at $387,000, 20 percent down, targeting a March 14 close. The broker sends the package back missing four items. First, 24 months of bank statements instead of 12, because the borrower has self employment income on the side from consulting work. Only 12 went in. Second, a letter of explanation for a $4,200 deposit in October, a gift from parents toward closing that the borrower had forgotten about. The lender flagged it immediately. Third, the executed purchase contract, which had been sent, but every single page is required including the addenda, and two pages were missing. Fourth, and the most frustrating, a full 12 month payment history on a rental the borrower is selling, because the lender wants to see the landlord tenant history even with the sale already under contract. That one can take three extra days to track down from a property manager. Every day spent chasing documentation is a day not spent closing. Six years of telling clients to get their paperwork together, and the file still shows up with holes in it. The lesson is that self employment income, gift funds, addenda and a departing rental each trigger a document the standard checklist does not always name.
