Paperwork And Documents

Paperwork And Disclosures Required By Mortgage Underwriters

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This Article On Paperwork And Disclosures Required By Mortgage Underwriters

As a mortgage loan officer it’s important to be prepared when meeting with customers. If loan officers are determined that an FHA-insured loan best fits and meets a customer’s needs, the next step is to collect all of the following items up-front at the inception of the loan application:

  • Complete the 1003 as detailed as possible

Thoroughly review overall credit report:

  • Review for credit disputes
  • Ask borrowers on potential public records such as judgments not on the credit report
  • Run AUS and see if borrowers can meet all conditions
  • Evidence of a Social Security number
  • Evidence can be a Social Security card or other documents the lender may accept as proof of this number
  • Ask what documents may be acceptable in place of a missing Social Security card if necessary
  • Or what could act as a stand-in until a replacement Social Security card arrives

In this article, we will discuss and cover Paperwork And Disclosures Required By Mortgage Underwriters.

Income Documentation And Qualified Income
Income Documentation And Qualified Income

Qualified income is one of the most important factors during the mortgage process. The following income documents are required by the mortgage underwriter:

  • Recent W-2s of past 2 years
  • Copies of signed two years federal income tax returns
  • Most recent paystubs (two)
  • Need 30 days of earnings
  • Most recent means paystubs that are the most up-to-date and available at the time of application

In cases where a borrower works the following jobs:

  • seasonal or nontraditional work
  • self-employed
  • receives commissions and/or bonus income

If borrowers work above type wage earner jobs, additional documentation or alternative documentation would be needed:

  • Check with the processor and/or underwriter
  • Being proactive and collecting these things upfront

Instead of submitting incomplete documents and having the file conditioned out it saves time in making things more efficient for all parties, and also builds credibility with the customer.

What Types Paperwork And Disclosures Are Required

An FHA loan also requires additional paperwork and disclosures to be provided with the loan application such as the following:

  • Important Notice to Homebuyer (HUD 92899-B)
  • FHA Amendatory Clause and Certification
  • For Your Protection—Get a Home Inspection
  • HUD Addendum
  • Homebuyer’s Choice Disclosure
  • Energy-Efficient Mortgage (EEM) Program Fact Sheet

Depending on the lender, loan officer might also need additional documents that the lender requires in its own application package. Each lender have their own special paperwork and disclosures.  It is important to check and verify exactly what documents are needed, as a complete package means fast approvals.

Files And Documentation
Files And Documentation

Many lenders will want the following items to be kept in the file before an application is submitted for underwriting and/or initial submission as part of your documentation as a loan officer:

  • Submission checklist
  • New case number (if applicable)
  • HUD-92900- LT, Loan Transmittal (completed in its entirety)
  • Initial and typed Uniform Residential Loan Application (URLA) (signed, dated, and completed in its entirety)
  • HUD-92900-A (pages 1 and 2 completed and signed)
  • Clear Government Services Administration (GSA) and Limited Denials of Participation (LDP) searches
  • FHA disclosure forms (noted earlier)
  • Copy of Social Security card (for streamline no income documentation loans)
  • Credit report showing only credit scores and satisfactory mortgage rating
  • Copy of note and deed of trust (to verify old case number and rate reduction or ARM)
  • The current payoff for refinances
  • Net tangible benefit worksheet
  • All letters of explanations regarding collections, known gaps of employment, large deposits that are on bank statements, etc. (i.e., anything out of the ordinary)

The number one reason for delays in the mortgage process is because loan officers did not properly submit documents required to process mortgage loan. Instead of submitting the loan package that is not complete, it is way better to make sure that all documents are complete. A well-experienced mortgage processor will not submit any loan package to underwriting with missing pages or missing documents. Incomplete sloppy files will frustrate mortgage underwriters and definitely delay the mortgage process.

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