Borrower Identification and Citizenship Verification Requirements

Written By: Stacey Sprain

The Federal Trade Commission estimates that as many as 9 million Americans have their identities stolen each year. In addition, Section 326 of the U.S. Patriot Act requires that the identification of each person applying for credit in the United States be established and validated accordingly.

It is the responsibility of the mortgage originator to verify the identity of each borrower at the time of loan application and the responsibility of the underwriter to make sure the sources of identity verification are acceptable for each case. Valid photo identification must be obtained from each borrower in order for the loan originator to complete the Patriot Act Identification disclosure which should be a standard disclosure in each loan application disclosure package.

In addition, each borrower’s credit report must be reviewed for red flag messages which will indicate any inconsistent data associated with the borrower’s name, date of birth and social security number combination. Documentation provided by the borrower should be reviewed to determine consistency of address information, social security number, spelling of name and any other pertinent data involved to establish identity.

So what documentation can we accept as evidence and how do we handle situations where no one meets the borrower(s) in person because the loan application is taken over the phone, over the internet or through the mail? How do we know the applicant is who they say they are?

First, as a matter of best practice, even though today’s technology makes it possible to receive loan applications without ever meeting the applicants in person, technology will never replace common sense. It’s always going to be best to meet the applicant’s in person. But whether meeting the borrower in person or not, it’s important to identify IF the borrower is a U.S. citizen, permanent resident alien, temporary resident alien or illegal alien in order to determine what sort of documentation you will need to request and obtain for review. To understand the differences between each category, you might turn to the website hosted by the U.S. Citizenship and Immigration Services (USCIS) at where you will find the following definitions:

United States Citizen: A native or naturalized person entitled to rights and privileges of the United States.
Acceptable sources of identification for U.S. citizens include:
• U.S. driver’s license with photo;
• State-issued non-driver identity card with photo;
• U.S. passport with photo; or
• Military-issued photo identification card
Permanent Resident Alien: A non-United States citizen who holds acceptable evidence of permanent residency issued by the U.S. Citizenship and Immigration Services (USCIS).

Acceptable sources of identification for permanent resident aliens include:

• A Permanent Resident Card/Alien Registration Receipt Card (USCIS Form I-551)
• Permanent Resident Card (USCIS Form I-551) accompanied by the applicable INS receipts.
• A USCIS receipt for a petition to remove conditions on residence (USCIS Form I-175), filed by the non-citizen spouse.
• A USCIS receipt for a petition to change immigration status, filed by the citizen spouse.
• Unexpired foreign passport that contains an unexpired stamp reading "Processed for I-551." Temporary Evidence of Lawful Admission for Permanent Residence. Valid until (mm-dd-yy). Employment authorized."

Non-Permanent Resident Alien: Non-United States citizens who are permitted to reside in the United States on a temporary basis and may have been granted authorization to work in the U. S. by the U. S. Citizenship & Immigration Services (USCIS).
Non-permanent resident aliens must have valid visas or other proof of legal residency. Acceptable visas for most mortgage lenders include but are not limited to:

• E-1, H-1B, H-2A, H-2B, H-3, L-1, G series and O-1.

Illegal alien: A person who immigrates across national borders in a way that violates the immigration laws of the destination country.

Illegal aliens may have ITIN numbers assigned by the U.S. government to allow the illegal immigrant the ability to file U.S. taxes even thought the individual is not recognized as having the legal right to reside in the United States. In some cases, illegal aliens may present fraudulent social security cards, fraudulent photo identification cards, and may present manufactured immigration documentation to try and pass through the system undetected. However, it’s become more and more difficult for these persons to make it through all systems undetected in today’s world. Most often a credit report will provide an indication of questionable identity with regards to the borrower name, social security number and birth date combination.

It’s EXTREMELY important nowadays to pay close attention to credit report Fraud Alert, OFAC and credit-related messages. Also, 9 times of out 10, questionable misrepresentation can be determined by reviewing the 1003 residence history in comparison to the residence/address history listed on the person’s credit report and also comparing the employer history on the 1003 to the employer history on the credit report. In every case where I have personally uncovered fraud, it was by reviewing those key components of the file that flagged my curiosity and caused me to “dig in” and investigate further using third party resources to validate and re-verify particular file information.

One thing to keep in mind, however, is that not all situations that render an alert of some kind are due to fraud so it’s important to always treat the situation with the “innocent until proven guilty” frame of mind. It’s important to always give our borrowers the benefit of doubt until we can prove otherwise.

In any case, identity has become a hot subject over the past several years and will continue to remain a major topic of interest in the years to come as our government attempts to assist the U.S. in financial recovery efforts.

In my own research, I found the following website helpful because it provides examples of each form of residency documentation --- You may find this site helpful as well.

About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at:

Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.