It seems to be the complaint of the season, as brokers continue to struggle with last minute requests from lenders.
“On this particular deal, the lender was so busy they didn’t make the call [requesting follow-up documentation] to rectify the situation until the last minute,” Layth Matthews, a broker with Rate Miser, told MortgageBrokerNews.ca. “I had to scramble to verify pension income in addition to the employment income; the employment income wasn’t as high as originally thought.”
According to Matthews, he received an "urgent" email on the morning of closing, saying the "verbal income verification came in light" and the lender required more documentation.
“I don’t really want to criticize the lender because you don’t know what led to it,” Matthews said. “The employer could have been sluggish in providing income details.”
Still, Matthews is echoing a growing number of brokers who charge that every deal is a documentation nightmare these days. “Condition requirements have become painstaking and nitpicky; underwriters have very little flexibility,” he said.
An alarming number of brokers complained about the same issues late in the mortgage origination process this summer. They point specifically to last minute audits throughout the summer, many the result of lender understaffing issues.
One former lender recently confirmed that challenge and its contributions to delays.
“There is often another level of review after the underwriter signs off on a deal before it gets funded; the underwriters sometimes miss something and it’s a function of underwriters being overwhelmed,” Tim Hill of Dominion Lending Centres
Primex Mortgages told MortgageBrokerNews.ca in September. “Volumes for lenders are also as high as they’ve ever been, and a lot of documents are being looked at very late in the process.”