Dear Loan Underwriters – Please stop asking for pointless, time wasting minutiae

From the “Huh?” files comes this request from a client’s loan underwriter:

Please provide the following:

1) Fully completed and executed Lead Based Paint Notice to Purchase Agreement.

Of note, the home being purchased was built in the year 2000. Lead based paint ceased to be manufactured in this county c. 1978. The Residential Lead-Based Paint Hazard Reduction Act of 1992 requires the disclosure of known information on lead-based paint and lead-based paint hazards before the sale or lease of most housing built before 1978.

But you want a completed disclosure for a home built some 22 years later. The Federal Government doesn’t require this, why do you?

2) VA Addendum to the purchase contract signed by buyer and seller stating the borrower is applying for a VA loan.

Uhm, what “VA Addendum”? No such addendum exists in the Arizona Association of Realtors form library. If I might, I’d like to draw your attention to line 70 of the purchase contract where the little box next to “VA” is clearly checked under “type of financing”. That this is a VA loan is also noted on line 10 of the purchase contract. So we need an “addendum” for what purpose?

3) You’ve asked the loan officer to supply five additional comparables over and above what the appraiser is using. Of course we still don’t have an appraisal, so we should… guess what comps the appraiser used? This begs the question of course, as to why you need five additional comparables and what you plan to do with them. Are you going to formulate your own opinion of value? Use them to second guess the appraiser? Wallpaper your cubicle? The loan officer, not being either an agent nor an appraiser, is consulting with a second appraiser now to meet this ridiculous request. It’s hard enough these days to get one appraiser to determine a value, now we get to involve two. Oh the joy.

And what if there aren’t five additional comparables – reasonable, good comparables that is.

Here’s the deal… I can get you this stuff (assuming you can provide this phantom VA Addendum you insist on having). I’ll inconvenience myself, the buyer, the seller, the seller’s agent and the loan officer. Processing needless paperwork will add to all of our work loads (your own included), and of course add time to the transaction. We’ll do all this because of some asinine policy at your lending institution. 

Here’s a thought… apply some common sense. Don’t ask for another form of information that you already have and for Pete’s sake, don’t ask for stuff you can’t possibly need.

Oh, but it’s policy.

Well it’s a stupid policy.

Think. Change the policy. Stop going about your day-to-day activities without engaging your brain. Raise your hand in some meeting and say, “This policy is ridiculous, why don’t we change it?”

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