Consumer Financial Protection Bureau: Pre-Approval Update

Consumer Financial Protection Bureau:
Pre-Approval Update

close up taxes documents to completed on a desk with glasses and pen

One thing buying consumers should be aware of during this transition period with the Consumer Financial Protection Bureau’s new rules and regulations starting October 3rd, is that Lenders are not allowed to request the buyer’s W-2 Forms when they get your information for a Pre-Approval. The consumer (buyer) can offer them to the loan officer for review. I would highly recommend that you offer your W-2 information to a loan officer.

Why?

Well, you want to be a qualified buyer. The loan officers need your W-2s to verify employment, which will provide essential information concerning your financial make up. This is crucial because a buyer does not want a “pre-approval” to be nothing better than the paper it is written on. Knowing that you are secured in your offer makes you a stronger buyer. It is really what should be happening anyway when you talk to a loan professional. The new regulations that are being put in place on October 3rd however, really indicate that lenders should NOT request W-2 information from buyers up front until the loan has started.

Hopefully, as we go through the transition period, new rules and regulations will be looked at to allow some leeway for lenders to send out into the world of Real Estate transactions a solid buyer, but for now… Buyers, bring your W-2’s in when you talk to your loan officer for a pre-approval. Hand it over with a smile and tell them to use them with your permission. It will make the deal so much smoother, I promise.