Abusive Lending Practices -- e.g. Bad Underwriting

I read today's Mortgage column in the Orange County Register. The columnist referenced a number of underwriting issues that came up during the home loan process; and the results. You can read about it here: www.ocregister.com

I've read this column for years and know the author. He is a good guy who is also a good loan originator. But, the issues he cites are pretty hard for me to imagine at Catalyst Lending. With our own in-house underwriters for almost all loan programs, we rarely have to deal with outrageous conditions or situations similar to those he cites.

To wit:

1. Unmarried couple required to marry prior to closing their FHA loan? No. Never happened on my watch and never have had this become an issue.

2. Self-employed borrower required to provide more income back-up after loan documents have been signed, but prior to funding. Never happens to my clients. I will add that very occasionally we are asked to provide an item post-closing that wasn't properly signed with loan documents. But never more back-up income items.

3. Married borrower buying as sole and separate property is asked to pay her new husband's tax lien. Not with my title guy. It isn't her lien, and he's not on title or on the loan.

4. Underwriter requests a physician's note that borrower won't become ill again and miss work. Huhhh?

5. Foreign born naturalized citizens are asked to provide certificate of citizenship although they have USA passports and Social Security cards. NOT!

All these items are virtually unthinkable in the environment my team works in. Our underwriters are extremely competent; always check guidelines for investors and programs; and virtually never request outrageous conditions for loan closing.

Catalyst Lending has our own team of underwriters and processors, and they are experts. We work together to make the loan process a positive experience. And, I have much more control over the process. 'nuff said.