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Backward Banking

scott s. Wrote: Apr 26, 2012 4:23 PM

The reality is most home loans today will be sold to Fannie/Freddie, and the bank that originates the loan will use something like Fannie's desktop underwriter software. Underwriting these days requires much better documentation of income and assets. You can expect any deposit other than paycheck into your account (over around $1000) to need documentation of where the deposit came from and why. In some cases under HARP if Fannie/Freddie currently own the loan they can waive the requirement for originating banks to provide "representations and warranties" concerning the borrower's documentation which otherwise allow Fannie/Freddie to "put-back" the loan.

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Backward Banking

I don't know if it's Dodd-Frank. Or if it's Barney Frank and Christopher Dodd themselves. Or if it's just the big bankers.

But the reality is, our banking system is completely screwed up when it comes to getting a home loan.

The problem used to be that the banks, in collusion with a federal government, made bad loans to bad people. That's what helped bring us the housing bubble and the inevitable bust that followed.

Today the problem is reversed. The banking system is so nuts it won't even allow banks to make good loans to good people. An...

Related Tags: Barney Frank Housing Market Dodd-Frank Big Banks Loans