Why do I need to give you so much information?

Got a question from a client the other day that I hear a lot, so I thought I’d post my response to it, in the hope that it would be helpful to more than just her.

Q: Why do I need to provide my social security number and birthday?  I’m not sure I want to give out that information.

A: Good Morning!

Let me give you a bit better idea what the approval and discovery process is for your loan.  There are, of course, a number of loan programs we can access.  Based on the info you provided already, we can eliminate most of those, and we’re left with three or four that are possibilities.

The closer we get to choosing a program, the more information we need, and the more specific that information has to be.  When we get to where we are now, choosing one loan out of the entire set of options, we are essentially underwriting the file as we go.  The Desktop Underwriter system is the same framework that the lender will use in underwriting the file, which has great advantages, but one of the disadvantages is that it requires mountains of specific data in order to function.  It is making very fine calculations about income, assets, and credit, and without the exact numbers, it doesn’t work.  We provide the income and asset numbers – though we will later have to verify to a human that those numbers are accurate – but the credit numbers it gets for itself.  To get those, it requires social security numbers and birthdays.

When it’s finished, we can have confidence that we have a real approval on a real loan that will eventually make it to closing.  But until we get the data, we can’t proceed from here.

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