Below is guidance for Loan Delivery and Purchase Guideline changes in light of all the recent business closures or issues surrounding COVID-19. As you are aware, this is a fluid situation and guidance may change quickly in the future.
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Conventional and Government Loans:
Verbal Verification of Employment requirements
- All Verbal VOEs (VVOE) must always be done in compliance with end Agency (FNMA, FHLMC, FHA, VA or USDA) guidance.
- For all loans using a third-party provider for the VVOE, such as The Work Number, the person who obtains the VVOE must also perform a Google search on the business or perform some other check to ensure the business is still open.
- A verbal VOE must be completed on all files on the day of disbursement.
- The employer must verify the borrower is in an active status (not suspended or on furlough without pay) and is still obtaining income. Borrowers who are suspended or furloughed and not getting paid while on suspension/furlough must qualify without the income.
- VVOE must be completed, if the lender is unable to obtain it because the business is closed the loan will be ineligible for purchase until it can be completed.
- All employment will be reverified by the lender prior to loan purchase. (Revised 5/18/20 and effective immediately)
- In an effort to streamline the purchase processes, ServiSolutions will no longer personally request the prior to purchase VVOE’s through the third-party vendor.
- We will accept the lender-provided updated VVOE’s
- The VVOE’s evidence of continued employment/income, needs to be aged no later than 10 days prior to the loan purchase.
- If the lender is unable to provide updated VVOE’s for each borrower and each job used in qualifying the borrower(s), then the Alternative Current Employment Documentation, as detailed in guidelines provided by HUD, VA, USDA, FHLMC, and Fannie Mae will still be required.
Alternative Current Employment Documentation
- Provided the lender is not aware of any loss of employment by the borrower the lender and the lender is unable to perform a VVOE the lender may provide the following alternative current employment verification documentation:
- Evidence the borrower has a minimum of 2 months Principal, Interest, Taxes and Insurance (PITI) in reserves
- AND either a year-to-date paystub or direct electronic verification of income for the pay period that immediately proceeds the Note date, or a bank statement showing direct deposit from the borrowers’ employment for the pay period immediately proceeding the Note date.
- A year-to-date paystub or direct electronic verification of income for the pay period that immediately proceeds the Note date OR a bank statement showing direct deposit from the borrowers’ employment for the pay period immediately preceding the Note date.
- If borrower was furloughed due to COVID 19, but has returned to work, or is expected to return to work in the same job capacity and income level, provide a copy of the furlough letter, in addition to standard verification documentation. (Added 4/16/20)
- Current agency requirement states that a paystub be dated no earlier than 30 days prior to the initial loan application date. Additionally, lenders must obtain the most current paystub that reflects year-to-date earnings. Paystubs must reflect no disruption of income.
- Follow current Agency Guidelines for documenting the Borrower’s business is open and operating. (Added 4/16/20)
- Follow agency guidelines. ServiSolutions-specific tax transcript requirements are temporarily waived.
- Follow agency guidelines. ServiSolutions will accept and follow all agency guidance for Desktop, Exterior Only appraisals.
Electronic/remote notaries, also known as Remote Online Notaries (RON)
- ServiSolutions is unable to accept electronic/remote notaries at this time.
- Any loan in which the lender has granted forbearance or loan modification is ineligible for sale to ServiSolutions. All loans must be current and pay history will continue to be required prior to purchase.
Representations and Warranties
- When delivering loans originated pursuant to the provisions of this announcement, the Lender warrants that the borrower is employed at the time the loan is delivered to ServiSolutions.
- All lender representations, warranties and covenants as defined in the Mortgage Origination and Sale Agreement remain in effect. Lender repurchase requirements of mortgages defined as Non-Qualified Mortgages and Early Payment Default Mortgages remains in effect.