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Mortgage Training: Incomplete Series: Assets Cont'd

Mini-Mortgage Training Series

Underwriters look at monthly asset statements on a daily basis. The average processor and loan originator (I'm not talking about my seasoned LO's and processors) usually do not pay attention to the statements they submit. If the assets are on the 1003 (Uniform Residential Loan Application) the underwriter will have look at the loan again based on the correct amount of assets.

This is a quick list of a few things you can look for when providing the underwriter documentation for assets:

RETIREMENT FUNDS- Provide the most recent statement. Only use 70% of these funds. A few words to look for: vested, employer match, IRA and before tax.
CERTIFICATE OF DEPOSIT- Provide most recent statement from the institution. Some lenders will take an internet printout if the printout somehow connects back to the borrower (Acct #'s from statements in the file, borrower's name or last 4 digits of Social Security number)
STOCKS & BONDS- Provide the current months statement.

NOTE: I will be jumping back to Income for a brief moment next week for a day or two. I've had a couple of underwriting questions that I would write a blog. It may be 101 to some of you, but from the questions I've received I believe it will be a great help to a lot of people.

Live FHA Training available in various states. Mortgage training dates range from April-May. If 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 courses will not only help you produce more effective loans, but they will also help you increase your closing ratio.

Posted by D. Bass ~ Blog: Ask The Underwriter on 03/21/2008 10:19 AM

Comments (7)

7 Comments on Mortgage Training: Incomplete Series: Assets Cont'd

D. Bass - Using only 70% of retirement funds as assets stated on the 1003 is something I don't think a lot of people realize. I have generally used 75%, am I wrong in doing this?

03/21/2008 10:21 AM

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

The 70% rule has been around for several years and I think your blog provides a useful tool for those that have not experienced true risk analysis underwriting.

Today, "real" underwriting is a lost art. Although with all the exotic loans gone PLUS the re-emergence of FHA loans, the originators that have been in the business for five years or less will now get a taste of it. Here in the Pacific Northwest there seems to be a shortage of good "knowledgeable" FHA underwriters.

Great post.

03/21/2008 10:31 AM

by Kirk Williams, #LMA 510-LO-32537 (Primary Residential Mortgage Inc. & IMS Consulting)

My lenders are requiring any online bank statements to not only show the account #'s (with bank of america that is impossible), but to be physically stamped on the back by the institution them self.

03/21/2008 10:36 AM

by Anthony Fico (National Currency Resources)

Thanks DB

In this enviroment 101 is OK with me. The basics is were I see the most mistakes and turndowns.

Happy Easter

Tony

03/21/2008 10:38 AM

by Tony Grego with AmeriSave

Jason- 70% is the amount you are suppose to use. 75% is generally used for rental income.

03/21/2008 10:44 AM

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

Kirk- How right you are! The invention of AUS has produced a crop of validators....

Anthony- I was wondering when they were going to stop using online statements, they want us to QC & verify, but this gives borrowers the opportunity to tamper with the documents!

Tony- Thank you Tony, I was a little hesitant to write this series at first, but I was getting so many questions and I knew they was coming from what Kirk mentioned in his comments "exotic loans". Some people don't remember what "underwriting" is because for so long we've been limited to the amount of underwriting we can do.

03/21/2008 11:13 AM

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

D. Bass we will also take a Bank Printout as long as the bank teller stamps it with the bank stamp and signs it. Oddly enough most bank printouts around here do not have the bank name on them, therefore the reason for the bank stamp.

03/21/2008 09:15 PM

by George Souto (McCue Mortgage Co.)

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