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Ask The Underwriter: Incomplete File Series= Asset Documents

Assets come in many forms and fashions (literally). You have the checking/savings, Certificate of Deposits, Retirement Accounts, Stocks, Bonds, etc... It's important to know what you're looking at so that you can submit the correct documentation. The goal is to receive the least amount of conditions as possible!

Here a few items to check for when looking at Bank Statements or Verification of Deposits:

1. Look for at least 2 months bank history when verifying "seasoned" funds to close or reserves - if the account only shows a month or they don't have another month they need to provide a paper trail for the money that was deposited.

2. The borrower only makes $2,000 dollars a month, but shows over $2,000 a month going into the bank- Provide a paper trail for these funds. Gifts, shared accounts, tax refunds, bonuses, etc... are pretty easy to trace. If it's a loan provide the documentation for the loan agreement (depending on what program your using), so that the payments can be counted in the DTI.

3. The VOD is not stamped, signed and date by a bank official

4. 2 month average needs to be completed

Retirement funds, Certificate of Deposits and Stocks & Bonds will be discussed tomorrow.

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Posted by D. Bass ~ Blog: Ask The Underwriter on 03/17/2008 07:19 AM

Comments (8)

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8 Comments on Ask The Underwriter: Incomplete File Series= Asset Documents

D.Bass, Great series of posts that you are doing and I can't agree more with you. Have to say I like the other way as well. I have done many SISA loans and it always surprises me when the AE calls me back and says I have overstated the Assets. When I tell them that is a true and real number they inform me that the underwriter won't believe the file and will ask for proof. I tell that is not a problem we can prove it. The AE's tell me that I should understate the Assets.

03/17/2008 07:22 AM

by My Favorite Mortgage.net - Matthew J Blum

Matthew- Okay here's my little confession: I hated the stated products! Because underwriting them depended on the last set of files that were audited. Like you said what is an "overstated" asset. I'm from a very large city up north, do you know how many loans I've seen with people in their early 20's with over $40,000 in the bank and they were only making like $25,000 a year (and I'm not talking about stated these were full doc loans) or how many doctors and lawyers who had NO money in the bank? It was a a great idea, but very few investors stuck to their own guidelines.

03/17/2008 09:44 AM

by D. Bass ~ Blog: Ask The Underwriter (Alpha Mortgage Training)

D. Bass - I'm not a fan of Stated Products either, though I believe there is a niche core of consumers that still need these and it actually makes sense for them and the investor (Self-employed, Servers in Restaurant, etc.) I'm hoping more and more Mortgage Professionals, REALTORS, & Consumers tune into your posts...

03/17/2008 02:09 PM

by Jason Sardi, Pennsylvania Mortgage Broker (First Choice Equity Group Inc.)

Jason- Remember when stated income was for people who were self-employed and worked in tip based industries?????

03/17/2008 03:30 PM

by D. Bass ~ Blog: Ask The Underwriter (Alpha Mortgage Training)

D. Bass a lot of headaches can be avoided by just simply knowing what documentation to provide, and when in doubt collect more than less, because it avoids having to go back to the Borrower later.

03/17/2008 06:58 PM

by George Souto (McCue Mortgage Co.)

George- So true! It would definitely put a lot of underwriters out of work if everyone did what they were suppose to do.

03/18/2008 09:56 AM

by D. Bass ~ Blog: Ask The Underwriter (Alpha Mortgage Training)

You have a really cool blog FYI!!

03/20/2008 11:12 AM

by Renee Burrows - Las Vegas NV Real Estate (Nevada Realty Solutions)

Renee- Thank You! I hope you continue to come around.

03/20/2008 02:15 PM

by D. Bass ~ Blog: Ask The Underwriter (Alpha Mortgage Training)