VOE Requirements and Guidance to Minimize Loan Purchase Disruptions
Mar 20, 2020 | Correspondent
Many of our correspondent partners have asked how to minimize loan purchase disruptions as the situation with COVID-19 evolves. Looking ahead to the next few weeks, and possibly months, several things could impact loan purchases, so we are working to identify ways to help purchases stay on track.
Many local governments and businesses are shutting down or have limited hours of operation and this could impact some of the services relied upon. Many borrowers will be financially impacted and there is a need to respond to these changes proactively.
Based on the current situation, we have updated our VOE requirements and are sharing additional guidance for our correspondent partners.
I. Update to VOE Requirements
We anticipate the coronavirus will impact numerous industries, particularly small businesses and self-employed individuals. As this continues to evolve, we recommend you stay in communication with your borrowers to obtain the most current financial information.
For our correspondent partners, we are requiring employment validation be done within 72 hours prior to signing closing documents on any loan intended for sale to Home Point. This is effective with closed loan package submissions on or after 4/1/2020. Re-verification must be done for any borrower whose income was used for loan qualification. Prior approved loan submissions will have this condition added as a requirement to clear prior to purchase. If we do not see evidence that employment was validated within 72 hours, we will not be obligated to purchase the loan.
II. Additional efforts to consider
Use settlement agents with e-recording capabilities and validate they will disburse if recording is delayed.
If the property is located in a county that supports e-recording, it may be critical that the settlement agent selected can e-record. If the settlement agent is not set up to e-record, it increases the chances of there being a delay in loan funding if the county recorder’s office is closed.If you operate in an escrow dry state, validate that the settlement agent selected is willing to disburse funds if the county recorder is closed and recordings might be delayed. Given the current environment, there may be instances where a settlement agent is unwilling to disburse when recording is delayed due to concern over gap in title insurance. However, many title insurance providers are now willing to insure over the gap period between disbursement and recording.
We recommend additional awareness for borrowers during this unprecedented time
It is important to let borrowers know that we are planning to proceed as normal, but given the current environment, there is a likelihood of unforeseen events. Everyone in the industry is focused on how we minimize these disruptions.
We believe there could be other unexpected delays due to COVID-19 disruptions
One potential delay we are monitoring is the ability to complete appraisals on time. With businesses temporarily shutting down and some areas requiring Shelter in Place, we recommend close monitoring of appraisal orders.
We’re here for you
During this difficult time, we are offering our support, flexibility, and understanding to help all of our partners manage both their personal well-being and their businesses. We anticipate that there will continue to be challenges that arise, and we will be in touch with updates and proactive guidance for our partners.