RC_LP_P_200.3 Verification and Supporting Documentation

Verification is an important part of the loan application process. One of its purposes is to ensure that the borrower is able to cope financially with the responsibility of a home mortgage. While there is little to indicate that applicants regularly and intentionally provide false information on their applications, it is not unusual to find that they unintentionally inflate income and deflate obligations. Consequently, investors and private mortgage insurers insist on independent verifications of almost all of the information provided by the applicant that relates to a borrower's ability to close the loan or to make payments in a satisfactory manner.

Verification and Supporting Documentation explores the various practices to ascertain the creditworthiness of a future borrower. The course begins with a look at the basic steps of verification. Next, it looks at how verification and supporting documentation can be compared to the loan application to find potential indicators of fraud. The course then looks at how employment and income are verified through the use of the verifications of employment, paystubs, tax returns, and W-2s. From there, it explores how to use verifications of deposit and other supporting documentation to verify assets and the borrower’s net worth. Finally, the course examines how the borrower’s willingness to pay can be verified using credit reports, credit scores, and verifications of loan, rent, and mortgage.

This is a single-family/residential course.