Conditional Approvals & Conditions

I was curious if anyone out there includes verification documents (i.e. income/tax returns) as a condition when conditionally approving a loan. We recently received advice that "If you are issuing a conditional approval, you are generally waiting for things the borrower cannot provide."

I'd appreciate any thoughts anyone may have.

For us, and the investors we deal with, conditional approval typically means that the borrower's details are verified and approved, but 3rd party needs are not met. Appraisal, title work, things of that nature. We wouldn't conditionally approve anything without verified income.

We recently received advice that "If you are issuing a conditional approval, you are generally waiting for things the borrower cannot provide."

I'm curious where that advice came from and on what regulatory citation it was based on.