Common use of Verification of Data and Documents Clause in Contracts

Verification of Data and Documents. ‌ This section address the requirements for verifying the data and documents relied upon in the underwriting decision are complete and accurate. Pre-Closing Verification (3/28/17)71‌ It is recommended that pre-Closing QC reviews be conducted after the final loan approval. However, they must be done when there is sufficient documentation in the file to perform the required review of data and documents. In addition to any pre-Closing reverifications that the PFI may have determined were necessary, the pre- Closing QC process must include a review of the following data and documents to ensure the documents are present and complete, and that the data relied upon in making the underwriting decision is accurate: • Data entered into Desktop Underwriter® (DU®) or Loan Product Advisor®; • All documentation required by the loan’s DU or Loan Product Advisor feedback certificate; • Borrower Identity; • Borrower Social Security number(s) or Individual Taxpayer Identification Number (ITIN); • Employment Documentation; • Calculation of income used to qualify the Borrower(s); • Calculation of sufficient assets needed to close or meet reserve requirements; • Appraisal or other property valuation data; • The conditions of Closing established by the PFI’s underwriter are or will be able to be satisfied; • Documentation of adequate mortgage insurance coverage by an eligible mortgage insurer; and • Condominium project documentation. PFIs must also ensure that they have a method for retaining in the Mortgage File the condominium project documentation needed to support their warranty that the project meets the MPF Program’s eligibility criteria. In addition, for units in condominium projects that were approved through Fannie Mae’s Condo Project Manager (CPM), PFI’s should validate that the Mortgage Loan File has been documented with the CPM decision and verify that the loan has been identified with the correct project review type code in the ULDD file. If a Xxxxxxxx's employment has not yet been verbally verified as required and the verbal verification would be completed within the required timeline, the PFI may complete the verbal verification of employment during the pre-Closing QC review. Data verification may be obtained either directly from the information source, for example, the Social Security Administration, IRS, employer, financial institution, or reliable third parties. The responsibility for the review should be delegated to personnel other than those with a vested interest in the Closing and must be independent of the PFI’s loan production staff. At a minimum, pre-Closing QC reviews must be conducted by individuals who have no involvement in the processing and underwriting decision of the loan being reviewed. Post-Closing Verification (3/28/17)72‌ PFIs must review the final terms of the Mortgage Loan to ensure they align with the data on which the underwriting decision was based. When a PFI’s QC review identifies discrepancies between the data that was used in the underwriting decision and the data verified through the QC process, the underwriting decision must be reassessed based on the newly verified information to determine whether the Mortgage Loan remains eligible as delivered. For Mortgage Loans processed through DU or Loan Product Advisor, the PFI must ensure that all data submitted to the AUS is true, correct, and complete. The PFI must verify that the Mortgage Loan File contains documentation that supports all data submitted to the AUS. In addition, the PFI must ensure that all of the Borrower’s liabilities were included in the analysis by the AUS. When there are inconsistencies between the data used for manual underwriting or the information submitted to the AUS and the verification or post-Closing QC reverification documents, the PFI must do the following: Step Description 1 Determine whether the discrepancies are within the tolerances allowed for the AUS as permitted by the MPF Guide. 2 For loans underwritten through an AUS, if discrepancies are outside the allowed tolerances, the Mortgage Loan must be resubmitted to the AUS using the correct data. If the PFI is unable to resubmit the Mortgage Loan, the PFI must manually perform a risk assessment using the documentation required by the AUS to determine if the Mortgage Loan meets the requirements of the Guides for manually underwritten Mortgages Loans. In these cases, the AUS limited waiver of representations and warranties is invalidated when Mortgage Loans that exceed AUS tolerances are not resubmitted to the AUS. For manually underwritten Mortgage Loans, if discrepancies cause the total debt ratio to increase by 3% or more, the PFI must manually underwrite the Mortgage Loan to determine if it meets the MPF Guide requirements. Under the MPF Xtra product, certain loan characteristics (such as manufactured homes) require the loan to be underwritten with DU and receive an Approve/Eligible recommendation. Mortgage Loans with these characteristics may not be manually underwritten during the post- Closing QC process. The loan is considered ineligible if it is resubmitted to DU during the post- Closing QC review but DU does not return an Approve/Eligible recommendation.