Example of the silliness

Here is an example of the udder ridiculous nature of the industry now. Working with a elderly borrower a Signing Agent fails to notice that the borrower during closing put down 2009 instead of 2010 on a 4506 government tax return request form. Now while admitting the error was with the Signing Agent who only has to review 40+ signatures on a package, this would seem like a silly error to hold up a funding. Not so! Lets ignore the fact that every closing package has a errors and omissions form (most have two, one for title and one for lender) that allows either the title or the lender to correct inconsequential errors. The title company required the Signing Agent to go back to the borrower to get it resigned. Then it needed to be resent by overnight at the Signing Agents expense so funding can occur 2 days late.

Now this form (4506) has been in closing packages for years and up until the season of "gotcha", has rotted in over 95% of files without anyone looking at it much less using it. Now with the season of "gotcha" upon us, every 4506 is being used in QC (Quality control) right away. This in spite of the fact that the borrowers have already signed one at application and it was used to qualify. So now we pull the borrowers tax returns twice! How is that helping prevent fraud? What is going to change between the first pull and the second? You are getting it directly from the IRS...what is going to change?

So this correction resulted in 8 phone calls to the borrower and Signing Agent, two faxes, three emails and a FedEx. When all a closer had to do was invoke the E&O form and make the correction themselves. The 4506 is NOT a legal notarized document. It is NOT date sensitive with the exception it usually expired in 90 days of closing. What is the sense of wasting all that time, resources and money on a redundant form? You waste the borrowers time, the Signing Agents, the closers and yes quality controls time. At least $100 in expenses went to ONE form correction! Before the time of "gotcha", before the lay offs of the competent, before the weaklings took over, this would have been taken care of by fax, regular mail or some closer would have just made the correction based upon the authority of the E&O form(s).

Nobody in the industry has the spine anymore to stand up and say "Enough is enough!" We have a new GFE (which, according to the morons at HUD, a "streamlined" form which went from 2 pages to 4) that the borrower does not see until close to closing, can't understand (nobody can) and does not even sign! We still have that useless TIL with a APR that has no basis in reality and you have quality control underwriting that serves no purpose but to slow down the system. Loan applications are up, approvals and closings are down...gee...yah think?