Any bank where this is the standard operating procedure for interacting with loan applications is not a bank that I'd want to do business with. Perhaps this was just one loan officer's way of doing things, and not the way of the business, but that's just not okay to me.

Any time anyone asks me for any part of my social over the phone, I ask for some other method of verification. Most folks have other ways of doing stuff. It's ridiculous that what should purely be an ID number is so powerful, but I can't change that fact, just how I interact with folks with regards to it.