This is a single-family/residential course.
Once the processor reviews the initial application and findings report, the process of verifying the information on the loan application begins.
Verification is an important part of the loan application process. One of its purposes is to ensure that the borrower is able to cope financially with the responsibility of a home mortgage.
There are three basic questions the processor answers during the verification process:
- Are there adequate liquid assets to close the loan?
- Is the borrower’s income stable and is it sufficient to meet this new obligation along with the added costs likely to be associated with homeownership?
- Does the credit history establish that the applicant will pay on time, assuming they can pay?
While there is little to indicate that applicants regularly and intentionally provide false information on their applications, it is not unusual to find that they unintentionally inflate income and deflate obligations. Consequently, investors and private mortgage insurers insist on independent verifications of almost all of the information provided by the applicant that relates to a borrower's ability to close the loan or to make payments in a satisfactory manner.
Verification and Supporting Documentation will explore the various practices to ascertain the creditworthiness of a future borrower. It begins with a look at the basic steps of verification. The course then looks fraud and what to look for in order to detect fraud including specific items on the application and other items such as information related to the subject property, the funds, and the borrower.
The course then looks at verifying employment and income, this ranges from paystubs, tax returns, and W-2s to verifying employment and other miscellaneous income as well as verifying self-employed income. From there the course explores how to verify assets and the borrower’s net worth by looking at supporting documentation and verification of deposits. It also describes how to evaluate equity in other real estate and vetting gift letters.
Finally, the course examines verifying the borrower’s willingness to pay. This is done by reviewing credit reports, credit scores, verifying a satisfactory payment history on other loans; real estate or otherwise; as well as their history paying their current rent or mortgage. It ends with information on how to deal with borrowers with credit problems.
The Verification Process
Employment and Income Verification
Verification of Assets and Net Worth
Verification of Willingness to Pay
Seat time approximately one (1) hour.