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Ask The Underwriter: Incomplete File Series= Income Docs

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Education & Training with Ask The Underwriter Mentor/ Mtg. Underwriter

Hello fellow Active Rain members...

I'm sorry I haven't completed this series I partnered with Appalachian Technical College (in Jasper, Ga & Woodstock, Ga) last week.  It's been an exciting week! 

My last post was about incomplete income documents. I wanted to continue on the subject of income.  I was going to discuss the Verification of Employment and the weirdest thing happen last week..... Someone emailed me that very question!

I've actually had several questions regarding the Verification of Employment.  I asked the last two mortgage professionals to email me a copy of the VOE (with the borrower's personal information blacked out).  I wanted to see why the underwriter asked for additional information.  I had an idea, but I wanted to be sure.  

Here are a few things that will make your Verification of Employment "incomplete":

1.  The Borrower's position/title on the 1003 doesn't match the present position on the Verification of  Employment (see examples below)- This is a common red flag.  Borrower's will sometimes "say" they are the manager, supervisor accountant, etc..., but when Verification of Employment is completed it shows a different title of position.

 

 

 

 

  

 

 

 

 

2.  The applicant's date of employment doesn't add up to the Yrs on this job section of the 1003 (see examples below)- It's not uncommon for borrower's to give estimates of how long they have been on a job.  If the borrower has given an incorrect amount of time and it doesn't equal to a two year employment history the underwriter will need an updated 1003 and the borrower's previous employer.

 

 

 

 

 

 

 

 

 

Part IV should have the title, signature and phone number of the person who completed the Verification of Employment (see examples below)- All documents sent to the lender are verified.  The lender/underwriter/QC department needs a contact name and number to verify the document.

 

 

 

 

 

 

FAX LINES! - Most (I'm saying "most") Verification of Employments are faxed or they are ordered from the work number for everyone.  There are times when the employer may require the Verification of Employment to be faxed, but I'm not talking about those times.  Your verification of employment should have two fax lines on it, one from the brokers faxing it to the employer and the employer faxing it back (or an email printout if they emailed it back)

I'll end the income part to this series tomorrow with W-2's and Tax Returns.

D. Bass

Mortgage Underwriter & Trainer

 If you are in need of mortgage training and you are looking to learn technique and theory than contact Alpha Mortgage Training.  Our Courses were written by a team of mortgage underwriters with a combined 58 years of conventional and government experience.  Our course will not only help you produce more effective loans, but they will also help you increase your closing ratio.

 

Comments (9)

Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life
D. Bass - I love the fact that we have insight into the world of the Underwriter.  Interesting stuff!
Mar 11, 2008 04:51 AM
Dionne Bass
Ask The Underwriter - Atlanta, GA
Blog: Ask The Underwriter
Thanks Jason!  If you have any underwriting questions feel free to email me.
Mar 11, 2008 05:54 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert
D. Bass quick question, why would a Borrowers "Job Title" make a difference as long as the income was stated correctly?
Mar 11, 2008 09:12 AM
Dionne Bass
Ask The Underwriter - Atlanta, GA
Blog: Ask The Underwriter

George- Great question!  All documents must match.  The entire file is built around the 1003, so the supporting documents must...well support it.  If the borrower's job title is not correct, that is a red flag for QC or the Underwriter to dig a little deeper. 

Examples:

Accountant=Bookkeeper or Pay roll clerk

Nurse= Certified Nurse Assistant

Dept Manager= Shift Supervisor

Administrative Assistant=Receptionist

please note, when I say "=" I'm giving examples of what the real position turns out to be.

I could go on....and I'm sure you guys could add a few. The bottom line is the borrower's title has to match what they already disclosed on the 1003 and the income must support the title.

.....sorry I got a little long winded (and thanks for taking the time to read my blog!)

Mar 11, 2008 02:55 PM
Matthew J Blum - (retired from the business)
Palm Beach Gardens, FL
D.Bass, THis is a great series of posts!  I know on a current loan we are going stated and the underwriter did not think I gave a good enough description of the clients job.  (Self-Employed)  luckily I was able to explain it quickly with out problems.
Mar 11, 2008 11:17 PM
Katrina Madewell
Charles Rutenberg Rlty- More than 5,000 agents(813) 777-1196 - Tampa, FL
Tampa FL Homes for sale | Tampa Bay - (813) 777-1196
gotta love the highlighter on the 1003 up there!
Mar 12, 2008 05:43 PM
Dionne Bass
Ask The Underwriter - Atlanta, GA
Blog: Ask The Underwriter

Matthew- I'm glad to hear that you were able to explain it.  Underwriters are getting beat up on the back end for products and guidelines the "investor" invented.  Guidelines are there to guide us and like I said a while ago its in all perception!  What I think is acceptable, might not be acceptable to the person who reviews the loan before or after they sell it.

Katrina- Thanks! I'm all about visual aides.  I learned a long time ago, the average mortgage professional doesn't know where every section on the 1003 is.

Mar 12, 2008 07:51 PM
Kevin Hancock
Evergreen Home Loans NMLS 3182 - Poulsbo, WA
The Hancock Mortgage Team
Very interesting to see things from the UWs point of view... thanks!
Mar 18, 2008 10:23 AM
Dionne Bass
Ask The Underwriter - Atlanta, GA
Blog: Ask The Underwriter
Kevin- Thank You, for coming around!
Mar 18, 2008 01:35 PM