If a residential mortgage application lacks a bank statement, the borrower should immediately contact the mortgage lender to discuss alternatives. The lender may accept pay stubs, tax returns, or asset verification documents to confirm income and liquidity. A written explanation for the missing statement, such as a temporary oversight or financial restructuring, can also help. If the lender refuses, options include securing a co-signer, adding assets to meet reserve requirements, or applying with a different lender. Proactive communication is critical to avoid delays or denials.

Lenders require bank statements to assess a borrower’s ability to repay by verifying consistent income and savings. Bank statements demonstrate liquidity, which reduces default risk. However, some lenders may accept alternative proof of liquidity, such as recent paychecks, retirement account statements, or proof of investment income. Data from the Urban Institute (2023) shows that 15% of mortgage applications face documentation issues, with bank statements being the most common missing document. The Federal Housing Finance Agency (FHFA) reports that 30% of loan denials in 2022 were due to insufficient documentation, including missing bank statements. Lenders adhering to Fannie Mae or Freddie Mac guidelines typically require bank statements to confirm reserves equal to at least 2-3 months’ mortgage payments. If a borrower cannot provide this, compensating factors like a higher credit score or lower debt-to-income ratio may be necessary. Ultimately, the absence of a bank statement can increase borrowing costs or require alternative underwriting strategies, highlighting the importance of proactive documentation management.