Uniform Residential Loan ApplicationThe lender may help the borrower complete the following sections in the Uniform Residential Loan Application (FNMA/FHLMC Form 1003). Sections in the Uniform Residential Loan Application I. Type of Mortgage and Terms of Loan II. Property Information and Purpose of Loan III. Borrower Information IV. Employment Information V. Monthly Income and Combined Housing Expense Information Processor’s Final Checklist Most processors use a loan application checklist to be sure that all of the documents in the loan package are complete. Once everything is in order, the loan application is ready for loan underwriting, which is a process to determine if the loan will be approved or denied. Residential Loan Application—FNMA/FHLMC form or other approved equivalent • • • • Residential Mortgage Credit Report Application matches verification documents• • Additional credit documentation All open credit accounts listed on the loan application• on the credit report Direct verification included for any accounts not listed• Verification of Income, Verification of Employment (VOE) Letter of explanation included for adverse items• • of work history School transcripts or diploma if borrower does not have 2 years• • • signed tax returns with schedules If borrower is relying on commission income, include 2 years’• • and balance sheets If borrower is self-employed, 2 years of profit and loss statements• • • ____________________________________________________________ Unit 4: The Loan Package Page 9 of 10Verification of Deposit (VOD) • • statements Average balance for past 2 months listed—if not, last 2 monthly• account balances or any recently opened accounts or gift letter, if applicable Source of funds: explanation of any significant changes in• • • Residential Appraisal Report—FNMA/FHLMC form or other approved equivalent Completed in full, including borrower’s signature• • • Sales Contract and/or escrow instructions All addendums and explanations• • payment, include proof of payment, such as canceled checks or the deposit receipt Additional documents that may be required If earnest money is equal to 50% or more of the ultimate down• • used to qualify or if borrower is obligated to pay support/alimony Verification of child support/alimony, if such income is being• • • • • explanation (if applicable) Documents must not be over 120 days old unless the property is new construction—then documents may be up to 180 days old. Bankruptcy filing statement, schedule of debt, discharge, andEligible alternative documentation Verification of Employment alternatives • year-to-date earnings indicated, and Pay stub or salary voucher for the most recent 30-day period with• • ____________________________________________________________ Unit 4: The Loan Package Page 10 of 10Verification of Deposit alternative • Borrowers must, at a minimum, report the ending balance and all transactions (deposits and withdrawals) Verification of Home Loan Payment alternatives The most recent 3 months’ depository institution statements.• • • Copy of all canceled checks for the most recent 12-month periodVI. Assets and Liabilities VII. Details of Transaction VIII. Declarations IX. Acknowledgment and Agreement X. Information for Government Monitoring Purposes Home loan payment history for the last 12 months, orCredit report reference for the last 12 months, orDocumented telephone verificationIRS W-2 forms for the previous 2 years, andAny other clarifying documentsRental agreements or leases (if applicable)Most recent 12-month payment history on previous home loansSigned construction cost breakdown (if applicable)Divorce decree/separation agreement (if applicable)Document includes all addendums and is signed by all partiesReview appraisal included (if available)Photos of subject property, street scene, and comparablesGift donor must be a member of the borrower’s immediate familyGift letter with verification of gift fundsVerified sufficient funds for closingIncome analysis formsCurrent and past 2 years’ financial and income statements2 years of signed tax returns with schedulesEmployment gaps explained, self-employed documentationYear-to-date and last year’s earnings sections completedOvertime and bonuses verified (if needed to qualify)VOEs covering the past 2 years’ work historyAll supplements, including public records examinationOccupancy status indicatedCompleted in full, including borrower’s signatureTyped copy preferred
Review - Four Steps in Obtaining a Real Estate Loan 1. Completing the Application 2. Processing 3. Underwriting (risk analysis) 4. Closing |