100% Paper-Free Mortgage Applications?

100% Paper-Free Mortgage Applications?

Getting approved for a mortgage could get a whole lot easier, or, it could just be a whole lot less messy. If you’ve ever financed a car you know how much paperwork there is, well, buying a house means quadruple that paperwork. There literally is a paper to sign stating that you’ve signed the previous paper. There is so much paperwork involved in a mortgage application and final closing but, that may start to change.100% Paper-Free Mortgage Applications?

Mortgage giants Fannie Mae has rolled out a new program that allows lenders to skip the collection of many documents that borrowers may need to submit. Lenders may be able to access third-party verification portals electronically for everything they need including W-2s, bank statements, and pay stubs. Now, this doesn’t eliminate all the paperwork because at the end of buying a home or refinancing you still have a lot of documents to sign, but this could simplify all of the paperwork needed to start the application.

Your employer, as well as your bank, already has all of this information that is needed to apply for a loan. Asking borrowers to produce the evidence of income that employers already have just adds to the confusion and frustration of applying for a home loan. We want to be simple and streamline and this is just one way to do it.

Fannie Mae is giving letters access to a nationwide database through what’s called Desktop Underwriter, a computerized verification system that analyzes a large share of loan applications in the country.

Mortgage credit and verification companies such as Equifax and Experian will provide lenders a direct check qualification eligibility that connects with employers, banks, and even the IRS.
This is really to minimize mistakes and make it easier for borrowers to apply for a loan without waiting for W-2, collecting data that may or may not be correct or current, and get the information directly to the lenders. This can also alleviate all of the faxing, scanning, mailings and even hand delivering piles of documentation.

Those who are eligible applicants who will get a Fannie Mae or Freddie Mac conventional loan. Not all lenders are currently eligible but more mortgage providers are becoming eligible on a daily basis. Fannie Mae and Freddie Mac account for nearly 60% of all the US mortgages and FHA, VA, and USDA loans are probably not far behind.

Are you concerned about these databases having all of your information?

Employers are very used to companies requesting information about employees but we do take your security and privacy into account. The massive database in which thousands of employers store information called the Work Number receives millions of employment records annually and can deliver that information to eligible and legal lenders upon request. However, all of this is done with the applicant’s permission. The Work Number has been around for years and you may not even be aware that your employer has used it. This company holds records for about one-third of US workers and security measures such as encryption and protected transfer information is of the most importance. Currently, lenders do not have access to the account and less the requested and go through a verification process. Regardless, the work on the side of the borrower is cut in half and it’s only a matter of time before things like appraisals and tax returns are also available.

If you have concerns about security it’s important to talk to your employer and your lender. We have security measures in place to keep your information safe as possible.

If you’d like to get started with the mortgage application process or have more questions about this type of application requirements contact my office today.

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