Before the Financial Crisis began in late 2007 just about anybody over 18 years of age could easily apply for and in most cases get a mortgage loan to buy and/or refinance Real property anywhere in the USA. Often income and asset documentation either was not required or very little documentation was needed to support the loan application. In addition borrowers credit worthiness (good credit with supporting credit scores) didn’t matter much if any to most lenders.
WOW, times have definitely changed! Today, 3.5 years later, the pendulum has swung completely to the other side of the spectrum. Lenders today demand that borrowers have strong credit, they must document their source of income, and prove they have the funds to close escrow. Today, we are truly in a “FULL DOCUMENTATION ENVIRONMENT”. This means simply that anything stated on a loan application (referred to often as a 1003) can and most likely will be required to be substantiated by supporting documentation. This is a very different world from the one of the Real Estate boom days, and it is truly a 180 degree shift in the Mortgage Lending Environment.