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Loan Prospector® Outreach

Mortgage-Readiness Assessment for Housing Professionals

Loan Prospector® Outreach Updated to Align with Recent Guide Requirement Changes

On February 23, 2014, Loan Prospector® Outreach was updated to align with recent requirement changes related to asset documentation provided in Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-18 [PDF] that are effective for mortgages with settlement dates on or after March 1, 2014. These updates relate to:

  • Verifying large deposits.
  • Using direct account verification to verify assets.
  • Applying Internal Revenue Service employer retirement accounts for used reserves.
  • Aligning or revising asset messages with eligible borrower funds and documentation requirements.

On or after February 23, 2014, you will receive the following revised feedback messages, when applicable, for all submissions and resubmissions to Loan Prospector Outreach:

Message Code
Feedback Messages
DOC 3X Other Assets:  For an asset account verified with direct account verification, document the source of funds for any account opened within 90 days of verification or has a balance that is significantly greater than the previously shown balance. If account statements are used to verify an asset account, document the source for any single deposit >25% of the total monthly qualifying income for the Mortgage.
DOC  B8 Gift Funds: Obtain a gift letter signed by the donor for each gift received. Gift letters must: state the donor’s name, mailing address and telephone number and that the funds are given by a Related Person, identify the Mortgaged Premises, state the amount of the gift and establish that the gift does not have to be repaid.
DOC B9 Gift Funds: If the verifications provided in the mortgage file do not show evidence that the gift funds have been deposited in the borrower's account, provide documentation of the transfer of funds from the donor to the borrower. A gift of equity must be reflected on the HUD-1 form or an equivalent closing statement.

DOC CP

Retirement Accounts:  Obtain account statements covering a 2-month period or a direct account verification reflecting the vested balance or % of vesting, as applicable. Up to 70% of the vested amount minus any outstanding loans may be used for reserves. Document the Borrower is permitted to make withdrawals regardless of current employment status if using accounts for reserves. If the assets are required for closing, evidence of liquidation is required.
DOC Y8 Retirement Accounts: Obtain an acct stmt covering a 1-month period or a direct acct verification, reflecting the vested balance or % of vesting, as applicable. Up to 70% of the vested amt minus any outstanding loans may be used for reserves. Document the Borrower is permitted to make withdrawals regardless of current employment status if using accounts for reserves. If the assets are required for closing, evidence of liquidation of non-liquid accounts is required.
DOC CN Depository, Stock, Bond, Mutual Fund and/or other Security  Accounts: Obtain an account statement covering a 1-month period or a direct account verification. If the assets are required for closing, evidence of liquidation of non-liquid accounts is required.
DOC DS Depository, Stock, Bond, Mutual Fund and/or other Security  Accounts: Obtain account statements covering a 2-month period or a direct account verification. If the assets are required for closing, evidence of liquidation is required.
DOC 3Y Sale of Assets: Obtain bill of sale and evidence of receipt of the proceeds  to document proceeds from the sale of an asset other than real property or exchange-traded securities.
DOC CD Sale of Home: Obtain either an executed HUD-1 or equivalent closing statement or if a relocation, obtain an executed buyout agreement (evidencing mortgage will be paid by employer/relocation company).
DOC CR Cash Value of Life Insurance: Obtain a verification from the insurance company that identifies the insurance company and the policy owner(s), shows the period covered and ending cash value and any outstanding loans. If the assets are required for closing, evidence of liquidation is required.

Customer Support

If you have any questions about these updates, please contact the Freddie Mac customer support line dedicated to Loan Prospector Outreach at 866-733-0446, Monday-Friday, 8:00 am-8:00 pm (EST). Closed on New Year’s Day; Martin Luther King, Jr. Day; Memorial Day; Independence Day; Labor Day; Thanksgiving; and Christmas Day.

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