We narrowed it down for you 🙂 . . . . Whenever the Underwriter asks for additional paperwork, it’s usually because of one of the following five reasons
1/ Something you sent contradicts or conflicts with something else in the file and so an explanation and additional supporting paperwork is asked for. Example: say your letter of explanation states you fell behind on bills because you were laid off in January 2009 and an Employment verification comes back indicating you were actually laid off in March 2010.
2/ Items provided are now outdated and we need an Updated version of it. For example if closing in September, a June Paystub will not be enough. We always need the most recent of everything.
3/ If additional funds are needed to close because for example, a change in the interest rate market results in less Lender-paid closing cost credit. This would mean additional bank statements or proof of withdrawal of funds from an annuity or 401k for example.
4/ If new credit inquiries appear as a result of an updated credit report – an explanation and supporting documentation would be needed.
5/There’s a new “unexplained” deposit on the recent bank statement you sent and supporting paperwork is required to explain it.
Of course there can be a variety of other reasons, but the above are the most common. A wise move would be to anticipate and prepare for these types of issues even before your Loan Officer picks up the phone to call you.