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#1449500 - 09/29/10 01:28 PM RESPA & Income Verification
gunches Offline
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Joined: Dec 2005
Posts: 210
We have a difference of opinion in our bank regarding when we can request income verification. When loan officers take a real estate loan application, can they collect pay stubs, tax returns, bank statements so I can verify the information and give them a pre-approval. Or, do we do the application, send out early disclosures, and then have the customer come back in with this information and hope the pre-approval we issued using just the application is still valid? Seems like a lot of trips for the customer

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#1449516 - 09/29/10 01:49 PM Re: RESPA & Income Verification gunches
raitchjay Online
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Joined: Oct 2009
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OK
We don't do pre approvals, but i know the RESPA changes were supposed to make pre approvals very problematic. You can't require verification documents as a prerequisite for providing a GFE.
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#1450206 - 09/30/10 03:46 PM Re: RESPA & Income Verification raitchjay
gunches Offline
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Joined: Dec 2005
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I think I worded that wrong, we don't do pre-approvals either. These are just applications for refinances that come in and want us to do the loan for them> In that case, can we collect the income information along with the application. Most clients bring it in when they come to do the application. Seems kind of crazy to tell them we can't take it from them

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#1450245 - 09/30/10 04:44 PM Re: RESPA & Income Verification gunches
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
IMHO everyone has stuck their heads in the sand on this one.

No where in RESPA does it say you cannot ask for or accept verification documents when the applicant brings in the application.

RESPA prohibits you from requiring these verifications documents as a condition of issuing the GFE. IOWs you can't have a policy that you have to have these documents before you consider it an application subject to RESPA.

As long as you issue the GFE within the 3 business days of receiving the application what are they going to cite you for?
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#1450275 - 09/30/10 05:04 PM Re: RESPA & Income Verification Dan Persfull
Oursisnottoreasonwhy Offline
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Oursisnottoreasonwhy
Joined: Nov 2004
Posts: 503
Central Illinois
To me "Pre-Approval" means the applicant does not have a property address in mind yet (one of the items required by RESPA to have an application)so you have a pre-RESPA application. So to pre-approve them you can collect the necessary information to do that. Once they have a property address filled in on the pre-RESPA application it becomes a RESPA application and you would provide early disclosures within 3 days.

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