We are working on a construction loan that transitions into permanent financing. The lender is Wells Fargo with the loan arranged through one of their retail agents (highly recommended by the builder).  Application submitted June 2009. FICO score 800 (me) and 779 (wife). Proposed loan $337,500, appraised $510,000. Income is $62,000 (wife, teacher) and $120,000 (me, self-employed). This will be a construction loan and then a 30 year fixed for November, locked @ 5.375% with one-time float-down option.

To document the self-employment I provided 2 years of tax returns, profit & loss documenting $60,000+ profit for the first half of 2009, and bank statements. Also we provided proof of over $50,000 liquid assets and of course W-2, equity in our current house, and so on.  You name it, we got it.

The question / problem -- we finally have a closing scheduled for a week from Friday (admittedly delayed for 1 week by us due to a death in the family). But over the last month, it seems that every couple days, we get hit up for some additional verification. It's nothing we have a problem with, but it's just downright annoying. Examples: verify that wife has a new employment contract for upcoming school year. Send contact information for personal banker and business insurance agent to verify position and length of self-employment. Send copy of homeowners policy on current house (because we do not escrow). Update this or that bank / asset statements (nearly every month). Get a credit report supplement.  Blah blah blah.

As noted, I have no problem jumping through their hoops, because our situation is just as solid as the day we applied. But my concern here, as a question for the experts -- is this normal, or are they harassing us now because they did a poor job of collecting everything that was needed up-front?

These days I feel the underwriter, does not want to take any chance whatsoever to give a loan for which we would have to come up with explanations at a later date.  I feel he is protecting himself.  Also I feel the underwriters are being overburdened.  I think they do not have the time to sit down and analysis a file from A to Z.  This is frustrating to both the Loan Officer and the Mortgage Applicant.

Kevin, this is totally normal nowadays. Lending guidelines haven't been this strick for many years and what you are experiencing is quite common.

As loans in process age, updating payment histories, assets, employment documentation, etc is the norm. Employment will usually be reverified again the day of or day before closing.

If there is no material change in your income, credit, and assets since the day you applied, you have no worries at this point.

Good Luck!

Agree with both the above.  Lenders are scared to lend and then have an investor come back to them for what may seem like trivial paperwork.  Hang in there.

Lenders are being forced to buy back loans for the smallest of reasons.  Holding mortgage loans on the books rather than selling them affects a bank's liquidity.  Especially with construction loans that  have a longer time from start to finish, lenders want to be sure there have been no adverse changes in financial circumstances.  Everyone sees changes or conditions that appear to be picayune on the surface, but make sense from the underwriter's point of view.  It can get annoying, but it is the world we live in at the moment.

Agreed.  Lending standards have tightened significantly.  You say you can provide the info.  Good for you.  The practices are designed to weed out those who can't.

Just a big "thanks" to all who replied here. We've been happy with the agent thus far, and it is good (I suppose) to hear that our experience is an ordinary one.  We needed that independent confirmation, I suppose, just like the underwriter does.

Thanks again,

Kevin

You should buy your agent a gift, Construction loans are very unforgiving.  Tons of work and the borrowers are usually upset as they are extremely complicated even after they close.  All I have to say is make sure that you finish on time you don't want to go past your due date! 

not to mention, your loan officer seems to be on top of it, by calling as soon as an issue or need arises, as opposed to sitting on it for a few days.