Why lie when applying for a mortgage when you know you will be caught? I never understand why people always try to justify not telling you the truth. Recently we had a couple lie about nearly everything on their loan application. From their address to their income and employment. First they lied about their present address on their application putting down their brother’s address as their loan application. This was a local address not to far from our office.
Next was a pay-stub that was over a month old and we asked for a most recent one. She said she would get another one to us the next day. She begged us that she needed to get this home before another buyer put it under contract before her. We gave her a list of everything we needed and she promised to have everything the next day. We went five days before we heard back form her again.
When we did get in touch with her we explained that five days has pasted in her real estate contract and we still had missing items on her loan application and still missing all her paperwork. She gave us all the information we needed over the phone so later that day we got their disclosures out to them in an email. Needless to say it was fours days before we were able to get hold of them again. By this time the Realtors finally received her earnest deposit money and completed the home inspection. We were able to walk them through signing their disclosures electronically and they got them to pay for their appraisal and have that ordered. We again asked for the documents they never sent us.
After another five days and several emails and phone calls we finally get them on the phone. First words out of their mouth is “why do you need this stuff?” “This is way too much personal stuff you are asking for. So, again we explain the process and the reason why we need every document one by one. During the conversation we find out they don’t live locally and that they used her brothers address and that their son who they had to go see at his house in another state turned out to be their house and they places of employment were in that state not this one. In the meantime my processor walks up to me and hand me the verification of employment that we order three days ago had just came back in and stated that she has been on a leave of absence for the last month and was not expected to return for another five months. In essence she is unemployed and has no income to qualify to purchase. I think she should uses her time off to visit the nut house.
So here is the impact of all this of all this without getting into the impact on my office and staff. The Realtors spent days of their time on showing properties, paperwork and inspections. The Title company spent money and used many of their resources and no one gets paid unless the deal closes except the appraiser and home inspector who are paid in advance. The buying couple is out the cost of the inspections and appraisal.
They now have a reported address added to their credit report which they never lived at and will also lose their earnest deposit money. But the main impact was on the sellers, they have packed up their home and went of searching for another home which they found and put under contract, they too paid for home inspections and appraisals on that home. Made many arrangements include a prospective job change. The seller of that home started packing and repeating that process as well for their selves.
This is a major impact to everyone not just the liars. Here is why now we have to use the thought process of that buyers could be liars and everyone one will have a very tough processes to go through to better protect everyone else. Realtors will not show anyone a home with out a solid pre-qualification letter. The loan originators will not issue a pre-qualification letter without first verifying many documents ahead of time. The listing Realtors will not allow a showing without first verifying the quality of the pre-qualification letter with the loan originator. Which is the way it should be, however now this will frustrate the good honest people and they will start the process with disgust from the very beginning.
So why lie?
Are you really that selfish and self centered? If you do lie, you will have a negative impact on so many other good people. Liars make the whole process for everyone else a lot harder. Liars are the reason everyone has to provide so many documents for the mortgage loan process. Liars cost our nation millions of dollars every day. Liars are the reason we have some many laws. We are going to find out the truth and then we will ask you “Why Lie?” It’s up to you on how easy you want your mortgage loan process to be. Ask questions, get all your facts straight before you start and we will see you at a happy closing table.