Lender asked for complicated income verification at the very last minute

My wife and I entered into a purchase contract for a new construction home (in CA) 6 months ago, and we watched the construction progress over the months. We went with the builder’s lender as they offered us credit that covers the majority of the closing costs. Throughout the past 6 months, we have been working closely with them, signing documents, and collecting the requested documents, all in a timely manner. As the closing date approaches, everything has been going smoothly so far, and we were told that we could expect a final approval sometime this week.

My wife has a pretty unique employment history which they asked for (and she provided) a letter of explanation 5-6 months ago when we started the whole process. She had pretty solid employment back in her home country, and only quit her job a couple months prior to coming to the US. About three years ago, she entered the US on a fiance visa and we got married shortly after her arrival. Due to her visa status in the US, she wasn’t able to seek employment for several months until she received employment authorization (EAD) from USCIS. Even then, it took her almost another year to land her current employment, which she has been with for the past 15+ months. Long story short, she has less than 2 years of income history in the US, and she has a very solid reason for her employment gap prior to her current employment.

So today, we’re only 9 days away from closing, and the lender/underwriter is asking for the first time, for my wife’s income verification (W2, paystubs) from 3+ years ago, back in her home country. The logistics of this would make it nearly impossible to obtain in such a short period of time, especially during the pandemic. She also tried providing a bank statement from the time period of her past employment, and highlighted all the transactions where her past employer direct-deposited earnings into her account, but that wasn’t accepted.

We understand that all this might be standard procedure, but what frustrated us the most is that they waited until 9 days prior to closing to ask for them. They knew of her employment history, so if it’s really important to them, why didn’t they ask for these document months ago? Her current income is also significantly more than what she had from 3+ years ago. Do they only care that she had an income, or will there be additional concerns about the past amount?

Just as we think things are pretty set, there seems to be so many last-minute surprises as we approach the closing date. This is making us very concerned that the closing date could get delayed, or we might have to seek out another lender, or the whole deal might go down the drain. This is really frustrating, what can we can do to improve the situation? Why are they being so stringent at this critical moment? Any legal avenues we can take?

submitted by /u/RCube123
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