With the new rules that took into effect since January, 2010, it has become borrowers to get mortgage pre-approval letters. As per the new rules, the lenders have to issue a good-faith estimate of total closing costs within three days of submission of a formal loan application. This good faith estimate remains binding on the lenders. Apart from this, the lenders are barred from requesting tax returns, bank statements, etc from the borrowers before they give the good faith estimate.

Thus, a large number of lenders are reluctant to be locked into closing costs therefore fewer banks are providing pre-approval letters for a loan amount on a property which is not formally appraised.