We just started taking loan applications over the phone. In these cases, of course, the borrower is not signing the application. The process here is to use that information to proceed with the underwriting with no subsequent requirement that the borrower sign off on the application related information taken over the phone. Can anyone tell me what the correct procedures would be (and the compliance requirement if any) regarding having a signed application in file.


Thank you.

My understanding is that it is always best to have a signed application,but there is no regulatory requirement. I would document that the application was received by phone.

Having a loan app signed is not a regulatory requirement. Investors may require it. I had one unsigned that I did a loan on. The military officer filed bankruptcy and neither his app nor his credit report showed 1/3 of his debts. Because there was nothing that said his statements were "true and correct", counsel said he never lied about his debts.

I'd recommend getting an app signed, but it isn't required and won't happen if the loan is denied and you never see the applicant. So definitely mark it "by phone" as this helps on GMI and joint intent as well.