Written By: Joan Ewing, OpEd Writer
Hello Readers! I would like to say that I am most anxious to share with you some of my experiences in the real estate industry. As an FHA DE Underwriter for the past 15 years, there has been instances when an initial 1003 and the final 1003 had so many discrepancies, I was not sure it was the same person. As the loan processor, you are the first person after the loan officer to review the 1003. Review the information to verify it makes sense. Question the loan officer. The fewer questions (conditions) the underwriter has the quicker your loan will be approved.
Let’s look at some potential red flags on the initial 1003, which should be questioned prior to underwriting. It is important that the following fields of information be completed. In addition to the obvious such as name, address and previous address – it is imperative that the borrowers – date of birth; years of school; time at present residence and current and former employer with correct dates. Let’s discuss why these areas of information are important:
Date of birth – How old is the borrower. In most states a borrower must be 18 years of age to purchase a house. I have seen parents who try to use an underage child’s income in order to qualify. This is not acceptable, unless it is social security with a guaranteed three years of continuance.
Years of school – Does the years of school match the occupation of the borrower? If a borrower is stating he is a teacher and has 12 years of education, chances are the borrower may be a substitute teacher or a teaching assistant.
Time at present residence and previous – Again is the borrower 25 years old and states he “owns” his residence for 12 years. Chances are, he is living with his parents and not paying rent.
What makes these areas so important on the 1003? These initial areas on the 1003 are the start of the picture of the applicant. They can be reviewed rather quickly and you know immediately if there are any potential problems. When reviewing a 1003, as I do when underwriting, rather than asking 10 different questions – 10 different times, write notes and ask all questions of your LO at the same time or e-mail the questions. He in return can get back to his borrowers with one telephone call.
We will cover the employment and verification of deposit in another blog; if you have any ideas you would like me to address in a blog, please let me know. See you soon.
About The Author
Joan Ewing - As an op-ed writer and active FHA DE Underwriter for the past 15 years, Joan Ewing is a proud NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). Joan brings years of FHA Government experience to her writings, letting her readers tap into her underwriting knowledge base.