Due to current market conditions, changes to our Employment re-verification process are necessary to manage risk.  The changes below are effective immediately and apply to all Agency and Government Loans that have not closed.

Wage Earners:

  • A Verbal Verification will remain a requirement before docs and at time of funding.
  • In those instances where a traditional WOE is unable to be completed, an email from the employer as an alternative will suffice, with the following restriction.
    • Be from the borrowers’ direct Supervisor/Manager or the employer’s HR Department; and
      • be from the employer’s email address directly to LoanStream; and
      • contain all the standard information required on a verbal verification of employment, include the name, title and phone number of the person providing the verification.
  • As an additional step, the following questions are being added to our Verbal Verification of Employment form.
    • Is the company still open and in operation?
    • Is the borrower still employed?
    • Is the borrower on a leave of absence or furloughed?
    • Has the borrower’s income been affected?
      • NOTE: Question No. 4 will not be asked on FHA Streamlines or VA IRRRLs.
  • We will also be requiring a paystub (immediately preceding the closing date) or Written Verification of Employment dated within 10 calendar days of closing.
    • Underwriter will add this as a PTD condition.
  • If hours worked are reduced, the reduced hours will be utilized for qualifying purposes.
  • If a borrower is on temporary leave, we can follow the temporary leave guidelines per program.

Self Employed:

  • A Borrower prepared YTD P&L is required confirming income is in line with the income being utilized for qualifying purposes.
    • YTD P&L must be signed and dated within 10 days of closing.
    • Underwriter will add this as a PTD condition.
  • If 2019 1040s have been provided and validated per guidelines, a 2019 Borrower prepared P&L signed and dated must also be provided.
    • Income must be in line with income being used for qualifying purposes.
    • Underwriter will add this as a PTD condition.

Rental Income:

  • If rental income is being utilized for qualification purposes and the most recent tax returns were used to calculate income, the following is required.
    • Copy of current fully executed lease
    • Underwriter will add this as a PTD condition.

Note: When utilizing 2019 tax returns for qualifying purposes, we will require one of the following:

  • 2019 1040 Tax Transcripts
  • Evidence of E-filing, signed 1040s, proof of refund received or amount owed to IRS clearing borrowers account

Should you have any additional questions, please contact your Account Executive.

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