Delegated Underwriting Reminders
Newrez LLC "Newrez" Approved Correspondent Clients: If you’re looking for a path to reduce the turn time from submission to loan purchase and avoid a loan being suspended for additional documentation, here’s a few of our top picks.
Purchase / Delivery Requirements
- COVID has impacted a lot of areas including the underwriting guidelines. The most common oversights include:
- Exceeding the shorter income and asset documentation expiration dates of 60 days at time of Note
- Not verifying that all mortgages for all REO, have been paid through the month prior to the Note date and
- For self-employed borrowers, the need to verify the business is open and operating in addition to providing 3 months bank statements in support of the Profit & Loss and the income used to qualify.
Reminder – because these guidelines are temporary, they don’t show on the AUS findings so be sure your procedures include meeting these additional requirements.
- An inaccurate DTI is one of the most common deficiencies, especially when it has to do with verifying the correct payment for REO.
- For properties that are financed, it’s not as simple as taking the payment shown on the credit report. A recent mortgage statement is needed to verify if the payment includes taxes and insurance. If it does not, a current tax bill along with the homeowner’s insurance bill is needed and must be included when qualifying.
- Even if a property is owned free and clear, taxes and insurance must be verified and included in the DTI.
- Lastly, for any property that is subject to an HOA fee, verification of that monthly fee is required. A recent billing statement or coupon that identifies the property and HOA fee is needed.
- CD-LE column of the Calculating Cash to Close section must match the last disclosed LE provided
- AUS must be run with correct property type
- IRS 4506C to be fully completed within 30 days of closing. A separate 4506C is required for business entity when business tax returns are present in file
- VVOE fully completed within specific timeframes as per product guidelines