Because of the 2008 financial crisis.

I'm not saying that needing documents is bad. We don't want a crisis to happen again. And the government put rules in place to ensure it won't.

The most common lending, Conventional loans, go through fannie mae and freddie mac, which are government sponsored enterprises. As long as they are sponsored and under federal oversight, they'll continue checking specific boxes for homebuyers.

There are documents needed to make sure you aren't overextending yourself on your budget.

There are documents needed to make sure the home is free and clear of other liens and encumbrances.

There are documents needed to prove your assets aren't illegally produced, or produced through acquiring more debt.

Another reason so many documents are needed is because someone else cheated. When cheaters play, more rules/documents get set up to stop the cheaters.

Example: Self employment is where a lot of cheaters cheat. (photoshop is an amazing tool). To counteract, most lenders require tax transcripts to match a buyer's tax returns.

Lenders need to compare what you filed with the IRS directly, to what you provided in tax returns.