Having trouble getting a mortgage? Here's why

My good friend Rich Moroscak at Southern Trust Mortgage (http://www.southerntrust.com/tysonscorner/richm) shared this great article from Forbes on all the hoops you have to jump through now to get a mortgage:

http://www.forbes.com/sites/moneybuilder/2012/03/09/the-perfect-loan-file-2/

As the article explains banks are now in the default avoidance business rather than the lending business.  It makes sense considering there were 22% default rates on mortgages loans made in 2007.  Nevertheless, the mortgage loan origination and underwriting process has become absurd.  The article is not exaggerating when it says that you will need to document every aspect of your financial life to the banks and then provide them with that information several times throughout the underwriting process.  Every transaction on your bank statements will be scrutinized and will have to be justified.  Good credit and a large down payment are no longer enough.  The underwriters now want the perfect paper file.

To survive this new regime have plenty of patience and grin and bear it when the underwriters ask for the same documents for the 10th time.  It will be worth it when you finally close on the property.