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Loan Application Overview
For those people who didn't apply for a new mortgage during the past decade the application process won't appear much different
then they vaguely recall. However, if you're one of the millions of mortgage applicants of the last decade and the time
has come to do it again, then you may be in for a shock. In the last 18-24 months there has been a firestorm of regulatory
change. Virtually every regulatory change had some influence on the mortgage application process: what defines an application,
when are disclosures and/or re-disclosures required, changed circumstance, fee disclosure, the new Good Faith Estimate, how
and when application fees are paid, the appraisal process, etc. When you apply for a mortgage today, keep in
mind that it's very similar to the way mortgage applications were processed and documented back in the old days, except back
then we didn't have computers everywhere. Before any "no-doc", "stated", "sub-prime" or
"alternative-doc" program got to permanently change housing finance, the industry documented everything.
Changes to the Application
Nearly the entire process of applying for a mortgage has been influenced by several, sweeping legislative changes  . These changes were enacted to, as the political arm would like us to believe, improve transparency and disclosure
throughout the mortgage application process, and to help eliminate predatory lending. Lenders have a responsibility
to satisfactorily document their customer's ability to repay the loan. However, the changes didn't stop with the mandated
re-introduction of purdent lending standards. Far from it. What's important to
understand is that these new rules will affect your application. The loan process now requires a lengthier,
more detailed process. While the new rules will help to protect a new mortgage consumer, the trade-offs for
the additional security are mass confusion and timeliness. All residential mortgage applications require lender/broker disclosure and applicant furnished documents. The documents
you will be required to furnish your lender depend upon individual circumstances. The main purposes for the
documents you are required to furnish exchange are to: (a) demonstrate your "reasonable" ability
to repay the mortgage, and (b) verify sufficient cash resources to meet the investment requirements.
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