Five years ago, just about anyone could qualify for a home loan. Now, we're at the other extreme.
The loan approval process, which in 2004 or 2005 might have been wrapped up in a day or even within hours, now takes much longer. Federal regulators are demanding that documentation be checked much closer to settlement — the final sales date on the property.
Settlement dates are being delayed by up to two weeks because of the extra hoops that lenders now must jump through. Private lenders are creating their own obstacles, as well. They're waiving fewer credit and payment requirements than they did a few years ago and are continually laying down new tripwires that can foul up a home purchase.
Lenders want to know how much money you have, and where it's been. That is their proper role, which was widely neglected during the boom.
But, at least from the perspective of those who work in real estate, the restrictions have gone beyond proper to the picayune. There are even anecdotal accounts of lenders asking newlyweds who collected cash at their wedding to produce letters from all their guests saying how much each may have contributed.
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