DATE: March 26, 2020
REMN Wholesale has modified our requirements in response to Fannie and Freddie’s guidance regarding employment and income continuation due to COVID-19. In addition, as FHA, VA and USDA have not yet provided guidance, REMN will be applying the new guidance to ALL product types (FNMA, FHLMC, FHA, VA and USDA) effective immediately:
VERBAL VERIFICATION OF EMPLOYMENT
• Employment must be validated no more than 48 business hours prior to closing (formerly 10 days) using one of the following methods:
o Traditional verbal verification OR
o An email, directly from the employer to REMN, verifying the borrower’s
employment status. The person sending the email should be the same
“qualified” individual that would be required for a traditional verbal verification
o If the borrower is self-employed, we will need verification the business is still open via a CPA and/ or Accountant statement or other validation method
• Paystubs and Bank Statements CANNOT be used as the sole source of verifying employment
CONTINUITY OF INCOME
• In addition to verifying employment prior to closing, REMN must also determine if there is any adverse change or planned change in the income used to qualify the borrower:
o Acceptable – the employer verifies there has been no significant adverse
change to their income
o Not Acceptable – the employer is not willing/unable to state no significant adverse change or planned adverse change. If this occurs additional documentation will be required in the form of the most recent paystub available and/or bank statements that show direct deposit. While paystubs and/or bank statements cannot be used to verify the borrower is still employed, they can be used to support no significant change in income.
• REMN must also consider the reasonability of continued income, based upon the borrower’s type of employment. Examples are:
o Acceptable – the borrower is working in a field/industry/employer that is
deemed an essential business and/or “working from home” but no change to their income
o Not Acceptable – the borrower works for a business (restaurant/retail
establishment/casino) that is closed, and they are not getting paid and/or
most of their income is tips
o Not Acceptable – the borrower has no income coming in or their income is significantly impacted, that is an indication they will most likely not have the ability to make their mortgage payment
FREQUENTLY ASKED QUESTIONS:
• Can you elaborate on how the 48 business hours is calculated?
o Wet State Purchase and Refinance: 48 business hours prior to the Note date
o Dry State Purchase and Refinance: 48 business hours prior to the Funding
• If the borrower is unemployed, but collecting unemployment, can that income be used instead?
o Unemployment resulting from Covid-19 is not eligible income
• What is REMN’s process for utilizing The Work Number, or other automated system?
o If the most recent update is beyond the 48 business hour timeframe and we are unable to verify employment via another alternative, then the loan cannot close. We are hoping that employers who solely use The Work Number will be more flexible given the current state of events
Please contact your Account Executive if you have additional questions.