Is this the new "normal"? Incredibly onerous underwriting for a rental...

[Lisa Moon]

I was a mortgage loan officer and an escrow officer 20-odd years ago, before the landscape shifted.  I know the drill about proper documentation, etc.  But the process I"m in now seems just ridiculous.

Hubby and I are both self-employed, for ages now (30+ years for him, 13 for me). We're buying our second SFR as an investment property with a conventional loan (20% down). I have no problem with supplying all the usual for self-employed individuals: two-years' tax returns, bank statements, explanation of name changes, P&Ls, etc. What is starting to get to me is the absurdity of some of the additional requests by the underwriter:

- letter from our CPA "verifying" the existence of both our businesses, and that they are "still in business". (These are businesses for which we've provided the tax returns and P&L's, mind you. They've already verified the LLC's with the state. Our past bank statements show obvious business and payroll expenditures. What else is there to "verify"??)

- a $100 inspection to verify that the house we're buying has, indeed, been vacated by the seller's tenants.  Apparently just the seller's word on it will not suffice - it has to be an inspection.  I can understand an inspection if I were claiming that the tenant was staying and wanted to use the income, but if not, then why?!?

- letter from our investment broker showing the liquidation of funds for the down payment, AND letter from the bank verifying the receipt of the wired funds.  Apparently the brokerage account statements, plus showing up at closing with the actual funds, is no longer enough.

- letter explaining a decline in my business income from one year to the next.  I guess this isn't that odd (although it's the rare small business that doesn't experience income fluctuations year to year!), but with all the other piddly stuff... ((sigh))

- letter explaining the expenses for my business from 2012.  This would be NO different from what's on the P&L and the tax return.  Why a separate letter?!?

I could go on, but at this point, I just want this to be over.  I'm not sure if this is what it's like for everyone out there, or if this particular underwriter is being particularly hard-nosed.  I need some perspective here, guys!