More on the “Ten ‘o Three” (1003) or, the Mortgage Application

With Data Integrity being a dominant theme in the mortgage industry all details on the mortgage application have to be correct and exact.  We discussed that a borrower cannot round up their numbers such as time of employment or years at current residence.

Here are a few other examples of how ‘right and tight’ the mortgage application data has to be:

• Dependents:  The application asks the borrower if they have dependents and the number of dependents.  Often this question is overlooked.  However, the lender is required to pull tax transcripts directly from the IRS as a fraud detection measure.  If there are dependents listed on the returns they must appear on the application.  Omitting this information will require the lender to correct the application, may require a letter of explanation from the borrower and could delay a commitment or a closing.

• Phone Numbers:  Must be correct and exact.  If the borrower has a home phone number that number must be on the mortgage application (versus a cell phone number).  The employment phone number should be the main employment line versus the borrower’s direct line.

• Addresses:  Again, all data must match from the application, to the appraisal, to the closing documents and if they don’t all will have to be corrected.  We are required to use the property address as determined by the United States Postal Service.  We have had issues when the borrower has used the # sign versus the word “unit” in the address description. “Unit” is the preferred description.

The borrower’s current address must also be correct.  The lender needs to know if the borrower’s tax returns were filed from a different address because the IRS will not release the transcripts if the request does not have an address that matches the actual tax returns.

Also, if the consumer utilizes a PO Box, the application must reflect that as their mailing address not the property address.

• Additional Properties: All real estate owned must be listed on the application. Borrowers have a tendency to omit other real estate owned if there is no mortgage on that property.  It will be found out on a ‘fraud guard’ report or on the tax transcripts so do not omit anything.

The bottom line is that this is an exacting process with multiple stop checks built in.  A consumer cannot hide anything, intentionally or not.  The process of correcting omissions or sloppiness can cost multiple days on the mortgage time line.  Lesson learned; get it right and tight from the very beginning in order to have a smooth process and a loan that closes on time with no surprises.

Questions?  Feel free to get in touch with us! 781-719-4664 or info940@fairwaymc.com