Five hundred page mortgage apps? Readers sound off

by MPA28 Jan 2014
Last week we talked to Brian Koss, executive vice president of Mortgage Network, about the industry’s growing frustration with the ever-expanding number of documents going into a typical mortgage application.

Koss said the growing size of typical applications made them unduly burdensome to both originators and consumers, and blamed a constant stream of new regulation and litigation for the mountains of paperwork. 

“It’s not like one regulation is causing it. It’s the fact that it’s a never-ending litany of legislation and litigation that drives every form that we have, so god forbid we ever take a form out,” Koss said. “Practically every form can be tracked back to a lawsuit that was filed.”

Bottom line, Koss said: Mortgage applications were getting too long and too complex to benefit the average consumer. And apparently MPA readers agreed.

Reader Nancy felt Koss’ pain dealing with reams of paperwork.

“I just uploaded an FHA loan (package) to a lender yesterday & it was 310 (pages),” she wrote. “Absolutely ridiculous!”

“I've been in the industry 15 years and the past 4 have been anything but easy,” MPA reader Bill posted. “The FEDS have lost all control of common sense.”

Edward also thought the amount of paperwork in most loan applications could be slashed drastically.

“Twenty-seven years in the business has revealed to me that borrowers want to know three things: what is my interest rate? what is my payment? how much will it cost?” he wrote. “The rest of the disclosures make them yawn and their eyes glaze over. If the legislators would start from this premise they could eliminate 3/4 of the unnecessary paperwork. Of course this would put many regulators and lawyers out of a job so there would be much resistance to any simplification. But so be it. This business does not have to be so difficult.”


  • by Al Hensling | 1/28/2014 8:20:49 AM

    Thank you Dodd Frank. The amount of required paperwork stems from the overly litigious environment that has been precipitated by Consumers "Gaming the System" when they decided that they did not want to live up to the obligation they agreed to repay.

  • by Ruth Linn | 1/28/2014 8:30:43 AM

    Unfortunately most of the business people involved have never known of a discipline called forms analysis. A good analyst determines the user first and works up; taking into account the humans and the machines required. Most borrowers do not have faxes and if they do they can barely use them and certainly not with legal length forms. Most of the forms are redundant or at the very least could be consolidated in a sane, easy to read and use manner. But it takes time, patience and the ability to work from the bottom up, which is just opposite of what the industry currently does.

  • by B | 1/28/2014 8:34:02 AM

    I fully agree with Bill. I too have spent over 27 yrs in the industry, sat in over 30 meetings with CFPB and I will emphatically state they are missing the point.

    Somehow, the concept of a disclosure form explain a concept or process to a consumer was mis-interperted by CFPB as a form of educating the consumer.

    Anyone with true industry experience, understands that the education of the consumer comes from the mortgage officers understanding and ability to convey the process and requirements of the mortgage application process.

    To date, I cannot find any Rule Writers at CFPB, who on their resume lists industry experience. This is the problem that cannot be resolved without CFPB's willingness. Go look at the CFPBs CAB, not a single person with mortgage mortgage origination experience.


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