THE ABCs OF VERIFICATIONS AND INFORMATION REQUESTS
GETTING INFORMATION QUICKLY
Knowing the when, where, and how of information requests is vital to a good processing system. A veteran processor typically has a vast array of methods and resources for getting the information needed to process a loan. This eliminates playing the waiting game and/or making multiple requests from the borrower. It also allows the processor to meet closing deadlines with far less difficulty. Let’s take a look at some of the typical verifications required during loan processing:
EMPLOYMENT- This should be the easiest verification but often is not. This happens because employment verifications are often provided only on a corporate level or by a third party verification service. Origination staff should be encouraged to ask the borrower what method his/her employer uses. The borrower is usually aware of the process and may already have a phone number, salary key, or pin number available for your use. Information on the borrower’s W-2 is also helpful in locating a payroll or human resource department to verify employment.
ASSETS - Bank and other asset account balances are typically easy to verify. In addition to traditional statements, a borrower can provide a transaction history stamped and signed by bank personnel or access their account on-line. You can also send a written VOD request but should be prepared for a delay and sometimes even a service charge.
MORTGAGE HISTORY and PAYOFF - This information is typically available via an automated phone system. The back of the mortgage statement usually has the contact number for mail, fax, and phone requests. A fee for the request is normally added to the loan balance. Be sure that your payoff is good through the date of funding.
Q. I am a contract processor. My closing is ratio is great, however my payments for processing are coming in far too slow. What can I do to manage my accounts receivables better?
A. We’ve definitely been there! There are a few things you can do: 1) The best thing to do is to make sure that you are listed as a line item on the HUD. Be sure to send your invoice to both the title company and the originator. 2) Make sure you have executed a processing agreement with the loan officer or broker specifying that you be paid within xx days of funding. 3) As often as possible, the originator’s accounts should be used for items relating to the loan file (i.e., credit reports, shipping, costs for verifications). This will reduce expenses and save time. If you opt to pay these up-front and request reimbursement, be sure to add them to the invoice and provide documentation to the originator to support the charge. -----------------------------------------------------------
INDUSTRY NEWS BRIEF
On Dec. 1, 2004, consumers in 13 states (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming) can begin to access a free credit report annually. The request can be made by visiting www.annualcreditreport.com , calling (877)322-8228, or mailing a form to Annual Credit Report Request Service P.O. Box 105281, Atlanta, GA 30348-5281.
Copyright 2004 Complete Mortgage Processing. All rights reserved.
