Whats the strangest thing an underwriter has requestedof you?

30 Replies

As real estate investors we fight the constant battle of getting approved for funding. Collecting paystubs and W2s seem pretty reasonable but then there are other requests that leave you scratching your head.

My recent favorite is "we need a witten explanation how you have bought so many houses with it signed and dated at the botrom"

Share your most rediculous underwriter requests.

I bought a 3-unit to owner-occupy one and the underwriter got confused on where my work location was vs. where the company's HQ was. I had to write "a strongly worded letter" explaining why I would be willing to increase my commute by so much. My letter basically said "because it's 5 minutes closer at the new property"   :)

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I had to write a letter of explanation that I did not own a property that was in another state that had been owned by my father who had died 20 years prior to this.

@Account Closed Ahh gotcha. Yea that makes sense. I totally agree they lender should verify with the IRS. At the end of the day its a numbers decision whether the lender should take on the risk to loan out the money. That being said I don't see how it would lower the risk of the lender to have a hand written letter about something.

Originally posted by @Joseph Weisenbloom:

@Account Closed That's exactly what I am talking about! Your proximity to work is a concern for your lifestyle not your ability to pay back the loan.

 Actually occupancy fraud was the concern in Bryan's case. The most common type of mortgage fraud: Buy an investment property, say you're going to live in it, don't ever actually move in. It  being 5 minutes closer to work works, so does describing how the home is a better fit for your family because it has more space outside for your dog, etc. Basically something to show that this owner occupied acquisition makes sense even from a non-financial perspective. 

I feel like I should have many many anecdotes to contribute here, but I think I'm just numb to it all by now and used to asking for completely crazy things. Usually I explain why we're asking for something ridiculous by leading with "...a historic form of mortgage fraud was..." and tie it into 2005-2007. Most ridiculous things make sense when you think about it as "back when this was NOT asked for, how did people take advantage and commit fraud?"

For example @Account Closed 's 4506-T thing. A historic form of mortgage fraud for self employed persons was to dummy up fake tax returns saying you make $1m/year for the lender, when in reality the returns you gave the IRS said you made $50k last year. Ergo we now need to validate that the returns you provided us are the same that you provided the IRS to prevent that from happening again. 

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Originally posted by @Joe Paoletta :

i had to provide car titles to all the vehicles i owned and prove that they were insured. 

 That seems completely crazy to me. Do you know why they required that?

For context: when someone owns a house free and clear, I've never had to ask for proof of insurance...

My full last name is Rodrigues Pereira, and I once had to send a letter to the underwriter stating that I wasn't Jason Rodriguez (my first name is Jacob), who was some random guy who had a judgement against him. I couldn't resist adding in the line "our respective names are spelled and pronounced entirely differently."

Joseph Weisenbloom I once was told according to the appraisal I must raise the rents in the duplex I was buying. this was after the loan was funded, about 3 hrs before closing. Another time I was asked to explain a credit hit on my credit history. The hit was the lenders credit check they did while approving me for the loan. Nuts huh?? RR

Originally posted by @Ralph R. :

Another time I was asked to explain a credit hit on my credit history. The hit was the lenders credit check they did while approving me for the loan. Nuts huh?? RR

 I've seen underwriters condition for that, and it's your loan officer's screw-up for asking anything of you... I just re-upload the credit report that the underwriter has already scrutinized a second time, and tag it as being for that condition like a smart-***. :P

I like to imagine them going "wait, where have I seen this credit report before...? oh, in THIS VERY LOAN I AM RIGHT NOW UNDERWRITING would you look at that!!"

My husband is a teacher.  We were moving  1.5 hours away over the summer. The underwriter was concerned he was unemployed over the summer.  teachers get paid year round. it took several letters to resolve. Same underwriter needed a letter stating he did not own a house that was not in his name somewhere.

On my primary residence purchase mortgage I was asked to explain why a particular address showed up on my credit report. It was a vaguely familiar address but not one that should have been on my credit report, so I freaked out. After hours of searching documents and pulling credit reports, I couldn't find the address anywhere. So I googled it. It was my real estate agent's office address. So I had to write a letter saying that it was my agent's address and that I was unable to verify it as being on any credit report. Why did I have to write that letter? Because after emailing the same to the lender, they instructed me to write it anyway for the file.

As someone who has been on the sales side, and is now on the underwriting side, I've seen conditions like the ones mentioned but also just as ridiculous things from the folks submitting loans. There's not a day that goes by that I don't shake my head at some incredibly asinine thing a customer or banker tries to get away with. I enjoy being on both sides of the table. Now, if you'll excuse me, I'm going to go start a thread about strange things borrowers have done on the underwriter's forum. It's called SmallerPockets. 

@Jake Knight Hahaha Fair enough. Don't mean to totally bash underwriters they are certainly nessasary to getting the loan done. Everyone does strange things sometimes. That being said everyone here is a real estate investor so I wanted to see if everyone was dealing with this same situation.