According to a recent article published by Bloomberg, some online lenders may not be verifying key pieces of information about Buyers prior to approving, and in some cases, funding mortgage loans.
Why is this a big deal? Does the recession just barely in the rear view mirror ring a bell? It is not in anyone’s interests for lenders to be issuing loans to borrowers who have not gone through the appropriate pre-qualification steps. One key piece of the article cited that some of these online lenders may not be doing something as simple as verifying employment and some are not verifying income. Yep, this is a problem.
The U.S. (and global) housing market has done a big about-face in the past six years, and issuing debt to people who may not have the ability to service it could be very problematic for everyone if we see defaults on the rise.
If you’re in the process of buying a home and have questions about the lending process, guidelines and what to expect, please reach out to me through the contact form on my website. I am not a lender, nor to I dispense advice about the lending process. However, I can share some great resources and have some outstanding local lenders in Central Oregon I can connect you with as you explore your options.
You can read the full Bloomberg article HERE.